Correlation Between ProShares Ultra and Franklin FTSE
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and Franklin FTSE at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining ProShares Ultra and Franklin FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Ultra Oil and Franklin FTSE India, you can compare the effects of market volatilities on ProShares Ultra and Franklin FTSE and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in ProShares Ultra with a short position of Franklin FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and Franklin FTSE.
Diversification Opportunities for ProShares Ultra and Franklin FTSE
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ProShares and Franklin is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Oil and Franklin FTSE India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin FTSE India and ProShares Ultra is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on ProShares Ultra Oil are associated (or correlated) with Franklin FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin FTSE India has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Franklin FTSE go up and down completely randomly.
Pair Corralation between ProShares Ultra and Franklin FTSE
Considering the 90-day investment horizon ProShares Ultra Oil is expected to generate 3.0 times more return on investment than Franklin FTSE. However, ProShares Ultra is 3.0 times more volatile than Franklin FTSE India. It trades about 0.05 of its potential returns per unit of risk. Franklin FTSE India is currently generating about 0.04 per unit of risk. If you would invest 4,028 in ProShares Ultra Oil on September 3, 2024 and sell it today you would earn a total of 442.00 from holding ProShares Ultra Oil or generate 10.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra Oil vs. Franklin FTSE India
Performance |
| Timeline |
| ProShares Ultra Oil |
| Franklin FTSE India |
ProShares Ultra and Franklin FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and Franklin FTSE
The main advantage of trading using opposite ProShares Ultra and Franklin FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, Franklin FTSE can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Franklin FTSE will offset losses from the drop in Franklin FTSE's long position.| ProShares Ultra vs. ProShares Ultra SP500 | ProShares Ultra vs. Direxion Daily SP500 | ProShares Ultra vs. ProShares Ultra QQQ | ProShares Ultra vs. Direxion Daily Technology |
| Franklin FTSE vs. Franklin FTSE Brazil | Franklin FTSE vs. Franklin FTSE China | Franklin FTSE vs. Franklin FTSE South | Franklin FTSE vs. Franklin FTSE Japan |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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