Correlation Between MicroSectors Gold and ProShares Ultra
Can any of the company-specific risk be diversified away by investing in both MicroSectors Gold and ProShares Ultra 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 MicroSectors Gold and ProShares Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MicroSectors Gold 3X and ProShares Ultra Gold, you can compare the effects of market volatilities on MicroSectors Gold and ProShares Ultra 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 MicroSectors Gold with a short position of ProShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of MicroSectors Gold and ProShares Ultra.
Diversification Opportunities for MicroSectors Gold and ProShares Ultra
-0.98 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MicroSectors and ProShares is -0.98. Overlapping area represents the amount of risk that can be diversified away by holding MicroSectors Gold 3X and ProShares Ultra Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Ultra Gold and MicroSectors Gold 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 MicroSectors Gold 3X are associated (or correlated) with ProShares Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Ultra Gold has no effect on the direction of MicroSectors Gold i.e., MicroSectors Gold and ProShares Ultra go up and down completely randomly.
Pair Corralation between MicroSectors Gold and ProShares Ultra
Given the investment horizon of 90 days MicroSectors Gold 3X is expected to generate 1.49 times more return on investment than ProShares Ultra. However, MicroSectors Gold is 1.49 times more volatile than ProShares Ultra Gold. It trades about 0.12 of its potential returns per unit of risk. ProShares Ultra Gold is currently generating about -0.11 per unit of risk. If you would invest 764.00 in MicroSectors Gold 3X on September 1, 2024 and sell it today you would earn a total of 66.00 from holding MicroSectors Gold 3X or generate 8.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MicroSectors Gold 3X vs. ProShares Ultra Gold
Performance |
| Timeline |
| MicroSectors Gold |
| ProShares Ultra Gold |
MicroSectors Gold and ProShares Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MicroSectors Gold and ProShares Ultra
The main advantage of trading using opposite MicroSectors Gold and ProShares Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MicroSectors Gold position performs unexpectedly, ProShares Ultra 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 Ultra will offset losses from the drop in ProShares Ultra's long position.| MicroSectors Gold vs. Microsectors Gold 3x | MicroSectors Gold vs. Direxion Daily 7 10 | MicroSectors Gold vs. Direxion Daily SP | MicroSectors Gold vs. Direxion Daily FTSE |
| ProShares Ultra vs. MicroSectors Gold 3X | ProShares Ultra vs. Direxion Daily SP | ProShares Ultra vs. Direxion Daily FTSE | ProShares Ultra vs. UBS ETRACS |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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