Correlation Between ProShares Ultra and Roundhill Daily
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and Roundhill Daily 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 Roundhill Daily 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 Roundhill Daily Inverse, you can compare the effects of market volatilities on ProShares Ultra and Roundhill Daily 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 Roundhill Daily. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and Roundhill Daily.
Diversification Opportunities for ProShares Ultra and Roundhill Daily
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and Roundhill is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Oil and Roundhill Daily Inverse in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roundhill Daily Inverse 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 Roundhill Daily. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roundhill Daily Inverse has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Roundhill Daily go up and down completely randomly.
Pair Corralation between ProShares Ultra and Roundhill Daily
Considering the 90-day investment horizon ProShares Ultra Oil is expected to generate 1.27 times more return on investment than Roundhill Daily. However, ProShares Ultra is 1.27 times more volatile than Roundhill Daily Inverse. It trades about 0.02 of its potential returns per unit of risk. Roundhill Daily Inverse is currently generating about -0.05 per unit of risk. If you would invest 3,658 in ProShares Ultra Oil on September 14, 2024 and sell it today you would earn a total of 252.00 from holding ProShares Ultra Oil or generate 6.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 71.38% |
| Values | Daily Returns |
ProShares Ultra Oil vs. Roundhill Daily Inverse
Performance |
| Timeline |
| ProShares Ultra Oil |
| Roundhill Daily Inverse |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ProShares Ultra and Roundhill Daily Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and Roundhill Daily
The main advantage of trading using opposite ProShares Ultra and Roundhill Daily positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, Roundhill Daily 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 Roundhill Daily will offset losses from the drop in Roundhill Daily'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 |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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