Correlation Between Disney and ProShares Trust
Can any of the company-specific risk be diversified away by investing in both Disney and ProShares Trust 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 Trust 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 Trust, you can compare the effects of market volatilities on Disney and ProShares Trust 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 Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disney and ProShares Trust.
Diversification Opportunities for Disney and ProShares Trust
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Disney and ProShares is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and ProShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Trust 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 Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Trust has no effect on the direction of Disney i.e., Disney and ProShares Trust go up and down completely randomly.
Pair Corralation between Disney and ProShares Trust
Considering the 90-day investment horizon Walt Disney is expected to generate 0.17 times more return on investment than ProShares Trust. However, Walt Disney is 5.8 times less risky than ProShares Trust. It trades about 0.5 of its potential returns per unit of risk. ProShares Trust is currently generating about -0.31 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 Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walt Disney vs. ProShares Trust
Performance |
| Timeline |
| Walt Disney |
| ProShares Trust |
Disney and ProShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Disney and ProShares Trust
The main advantage of trading using opposite Disney and ProShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney position performs unexpectedly, ProShares Trust 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 Trust will offset losses from the drop in ProShares Trust's long position.| Disney vs. Roku Inc | Disney vs. AMC Entertainment Holdings | Disney vs. Paramount Global Class | Disney vs. Warner Bros Discovery |
| ProShares Trust vs. Vanguard Total Stock | ProShares Trust vs. SPDR SP 500 | ProShares Trust vs. iShares Core SP | ProShares Trust vs. Vanguard Total Bond |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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