Correlation Between ProShares Ultra and IShares International
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and IShares International 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 IShares International 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 iShares International Dividend, you can compare the effects of market volatilities on ProShares Ultra and IShares International 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 IShares International. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and IShares International.
Diversification Opportunities for ProShares Ultra and IShares International
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ProShares and IShares is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Oil and iShares International Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares International 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 IShares International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares International has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and IShares International go up and down completely randomly.
Pair Corralation between ProShares Ultra and IShares International
Considering the 90-day investment horizon ProShares Ultra is expected to generate 1.12 times less return on investment than IShares International. In addition to that, ProShares Ultra is 3.26 times more volatile than iShares International Dividend. It trades about 0.02 of its total potential returns per unit of risk. iShares International Dividend is currently generating about 0.06 per unit of volatility. If you would invest 5,642 in iShares International Dividend on November 19, 2024 and sell it today you would earn a total of 1,460 from holding iShares International Dividend or generate 25.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra Oil vs. iShares International Dividend
Performance |
| Timeline |
| ProShares Ultra Oil |
| iShares International |
ProShares Ultra and IShares International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and IShares International
The main advantage of trading using opposite ProShares Ultra and IShares International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, IShares International 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 IShares International will offset losses from the drop in IShares International's long position.| ProShares Ultra vs. ProShares UltraShort Oil | ProShares Ultra vs. ProShares Ultra Basic | ProShares Ultra vs. ProShares Ultra Financials | ProShares Ultra vs. ProShares Ultra Real |
| IShares International vs. iShares MSCI Intl | IShares International vs. iShares MSCI Intl | IShares International vs. iShares MSCI Intl | IShares International vs. iShares Currency Hedged |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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