Correlation Between ProShares Ultra and IShares Paris
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and IShares Paris 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 Paris 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 Paris Aligned Climate, you can compare the effects of market volatilities on ProShares Ultra and IShares Paris 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 Paris. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and IShares Paris.
Diversification Opportunities for ProShares Ultra and IShares Paris
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ProShares and IShares is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Oil and iShares Paris Aligned Climate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Paris Aligned 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 Paris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Paris Aligned has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and IShares Paris go up and down completely randomly.
Pair Corralation between ProShares Ultra and IShares Paris
Considering the 90-day investment horizon ProShares Ultra Oil is expected to under-perform the IShares Paris. In addition to that, ProShares Ultra is 3.12 times more volatile than iShares Paris Aligned Climate. It trades about -0.15 of its total potential returns per unit of risk. iShares Paris Aligned Climate is currently generating about -0.06 per unit of volatility. If you would invest 5,608 in iShares Paris Aligned Climate on January 16, 2025 and sell it today you would lose (207.00) from holding iShares Paris Aligned Climate or give up 3.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra Oil vs. iShares Paris Aligned Climate
Performance |
| Timeline |
| ProShares Ultra Oil |
| iShares Paris Aligned |
ProShares Ultra and IShares Paris Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and IShares Paris
The main advantage of trading using opposite ProShares Ultra and IShares Paris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, IShares Paris 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 Paris will offset losses from the drop in IShares Paris' 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 Paris vs. Northern Lights | IShares Paris vs. Inspire SmallMid Cap | IShares Paris vs. Inspire Global Hope | IShares Paris vs. Inspire Tactical Balanced |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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