Correlation Between ProShares Ultra and NuShares Enhanced
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and NuShares Enhanced 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 NuShares Enhanced 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 NuShares Enhanced Yield, you can compare the effects of market volatilities on ProShares Ultra and NuShares Enhanced 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 NuShares Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and NuShares Enhanced.
Diversification Opportunities for ProShares Ultra and NuShares Enhanced
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ProShares and NuShares is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Oil and NuShares Enhanced Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NuShares Enhanced Yield 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 NuShares Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NuShares Enhanced Yield has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and NuShares Enhanced go up and down completely randomly.
Pair Corralation between ProShares Ultra and NuShares Enhanced
Considering the 90-day investment horizon ProShares Ultra Oil is expected to generate 6.8 times more return on investment than NuShares Enhanced. However, ProShares Ultra is 6.8 times more volatile than NuShares Enhanced Yield. It trades about 0.24 of its potential returns per unit of risk. NuShares Enhanced Yield is currently generating about 0.06 per unit of risk. If you would invest 3,943 in ProShares Ultra Oil on August 29, 2024 and sell it today you would earn a total of 503.00 from holding ProShares Ultra Oil or generate 12.76% 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. NuShares Enhanced Yield
Performance |
| Timeline |
| ProShares Ultra Oil |
| NuShares Enhanced Yield |
ProShares Ultra and NuShares Enhanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and NuShares Enhanced
The main advantage of trading using opposite ProShares Ultra and NuShares Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, NuShares Enhanced 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 NuShares Enhanced will offset losses from the drop in NuShares Enhanced'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 |
| NuShares Enhanced vs. Nuveen Enhanced Yield | NuShares Enhanced vs. Nuveen ESG Aggregate | NuShares Enhanced vs. Virtus Newfleet Multi Sector | NuShares Enhanced vs. iShares iBonds Dec |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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