Correlation Between ProShares Ultra and Timothy Plan
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and Timothy Plan 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 Timothy Plan 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 Timothy Plan , you can compare the effects of market volatilities on ProShares Ultra and Timothy Plan 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 Timothy Plan. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and Timothy Plan.
Diversification Opportunities for ProShares Ultra and Timothy Plan
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ProShares and Timothy is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Oil and Timothy Plan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Plan 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 Timothy Plan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timothy Plan has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Timothy Plan go up and down completely randomly.
Pair Corralation between ProShares Ultra and Timothy Plan
Considering the 90-day investment horizon ProShares Ultra Oil is expected to generate 2.46 times more return on investment than Timothy Plan. However, ProShares Ultra is 2.46 times more volatile than Timothy Plan . It trades about 0.37 of its potential returns per unit of risk. Timothy Plan is currently generating about 0.26 per unit of risk. If you would invest 3,943 in ProShares Ultra Oil on August 27, 2024 and sell it today you would earn a total of 704.00 from holding ProShares Ultra Oil or generate 17.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra Oil vs. Timothy Plan
Performance |
| Timeline |
| ProShares Ultra Oil |
| Timothy Plan |
ProShares Ultra and Timothy Plan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and Timothy Plan
The main advantage of trading using opposite ProShares Ultra and Timothy Plan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, Timothy Plan 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 Timothy Plan will offset losses from the drop in Timothy Plan'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 |
| Timothy Plan vs. Timothy Plan | Timothy Plan vs. Timothy Plan LargeMid | Timothy Plan vs. Timothy Plan High | Timothy Plan vs. Timothy Plan Small |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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