Correlation Between Disney and ProShares Short
Can any of the company-specific risk be diversified away by investing in both Disney and ProShares Short 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 Disney and ProShares Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walt Disney and ProShares Short MSCI, you can compare the effects of market volatilities on Disney and ProShares Short 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 Disney with a short position of ProShares Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disney and ProShares Short.
Diversification Opportunities for Disney and ProShares Short
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Disney and ProShares is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and ProShares Short MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Short MSCI and Disney 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 Walt Disney are associated (or correlated) with ProShares Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Short MSCI has no effect on the direction of Disney i.e., Disney and ProShares Short go up and down completely randomly.
Pair Corralation between Disney and ProShares Short
Considering the 90-day investment horizon Walt Disney is expected to generate 2.28 times more return on investment than ProShares Short. However, Disney is 2.28 times more volatile than ProShares Short MSCI. It trades about 0.48 of its potential returns per unit of risk. ProShares Short MSCI is currently generating about 0.18 per unit of risk. If you would invest 9,613 in Walt Disney on August 30, 2024 and sell it today you would earn a total of 2,147 from holding Walt Disney or generate 22.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walt Disney vs. ProShares Short MSCI
Performance |
| Timeline |
| Walt Disney |
| ProShares Short MSCI |
Disney and ProShares Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Disney and ProShares Short
The main advantage of trading using opposite Disney and ProShares Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney position performs unexpectedly, ProShares Short 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 ProShares Short will offset losses from the drop in ProShares Short's long position.| Disney vs. Liberty Media | Disney vs. Atlanta Braves Holdings, | Disney vs. News Corp B | Disney vs. News Corp A |
| ProShares Short vs. ProShares Short MSCI | ProShares Short vs. ProShares UltraShort MSCI | ProShares Short vs. ProShares UltraShort MSCI | ProShares Short vs. ProShares Short MidCap400 |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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