Correlation Between ProShares Short and AXS 125X
Can any of the company-specific risk be diversified away by investing in both ProShares Short and AXS 125X 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 Short and AXS 125X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Short Dow30 and AXS 125X NVDA, you can compare the effects of market volatilities on ProShares Short and AXS 125X 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 Short with a short position of AXS 125X. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Short and AXS 125X.
Diversification Opportunities for ProShares Short and AXS 125X
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ProShares and AXS is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Short Dow30 and AXS 125X NVDA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXS 125X NVDA and ProShares Short 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 Short Dow30 are associated (or correlated) with AXS 125X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXS 125X NVDA has no effect on the direction of ProShares Short i.e., ProShares Short and AXS 125X go up and down completely randomly.
Pair Corralation between ProShares Short and AXS 125X
Considering the 90-day investment horizon ProShares Short Dow30 is expected to generate 0.13 times more return on investment than AXS 125X. However, ProShares Short Dow30 is 7.62 times less risky than AXS 125X. It trades about -0.04 of its potential returns per unit of risk. AXS 125X NVDA is currently generating about -0.13 per unit of risk. If you would invest 3,036 in ProShares Short Dow30 on August 30, 2024 and sell it today you would lose (481.00) from holding ProShares Short Dow30 or give up 15.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Short Dow30 vs. AXS 125X NVDA
Performance |
| Timeline |
| ProShares Short Dow30 |
| AXS 125X NVDA |
ProShares Short and AXS 125X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Short and AXS 125X
The main advantage of trading using opposite ProShares Short and AXS 125X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Short position performs unexpectedly, AXS 125X 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 AXS 125X will offset losses from the drop in AXS 125X's long position.| ProShares Short vs. ProShares Short QQQ | ProShares Short vs. ProShares Short SP500 | ProShares Short vs. ProShares UltraShort Dow30 | ProShares Short vs. ProShares Short Russell2000 |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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