Correlation Between Disney and ProShares UltraPro
Can any of the company-specific risk be diversified away by investing in both Disney and ProShares UltraPro 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 UltraPro 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 UltraPro Dow30, you can compare the effects of market volatilities on Disney and ProShares UltraPro 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 UltraPro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disney and ProShares UltraPro.
Diversification Opportunities for Disney and ProShares UltraPro
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Disney and ProShares is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and ProShares UltraPro Dow30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraPro Dow30 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 UltraPro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares UltraPro Dow30 has no effect on the direction of Disney i.e., Disney and ProShares UltraPro go up and down completely randomly.
Pair Corralation between Disney and ProShares UltraPro
Considering the 90-day investment horizon Walt Disney is expected to generate 0.66 times more return on investment than ProShares UltraPro. However, Walt Disney is 1.51 times less risky than ProShares UltraPro. It trades about 0.48 of its potential returns per unit of risk. ProShares UltraPro Dow30 is currently generating about 0.26 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 UltraPro Dow30
Performance |
| Timeline |
| Walt Disney |
| ProShares UltraPro Dow30 |
Disney and ProShares UltraPro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Disney and ProShares UltraPro
The main advantage of trading using opposite Disney and ProShares UltraPro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney position performs unexpectedly, ProShares UltraPro 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 UltraPro will offset losses from the drop in ProShares UltraPro's long position.| Disney vs. Liberty Media | Disney vs. Atlanta Braves Holdings, | Disney vs. News Corp B | Disney vs. News Corp A |
| ProShares UltraPro vs. ProShares UltraPro Short | ProShares UltraPro vs. ProShares UltraPro SP500 | ProShares UltraPro vs. ProShares UltraPro Russell2000 | ProShares UltraPro vs. Direxion Daily SP500 |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |