Correlation Between IShares Select and ProShares
Can any of the company-specific risk be diversified away by investing in both IShares Select and ProShares 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 IShares Select and ProShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Select Dividend and ProShares SP 500, you can compare the effects of market volatilities on IShares Select and ProShares 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 IShares Select with a short position of ProShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Select and ProShares.
Diversification Opportunities for IShares Select and ProShares
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and ProShares is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding iShares Select Dividend and ProShares SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares SP 500 and IShares Select 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 iShares Select Dividend are associated (or correlated) with ProShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares SP 500 has no effect on the direction of IShares Select i.e., IShares Select and ProShares go up and down completely randomly.
Pair Corralation between IShares Select and ProShares
Considering the 90-day investment horizon iShares Select Dividend is expected to generate 1.17 times more return on investment than ProShares. However, IShares Select is 1.17 times more volatile than ProShares SP 500. It trades about 0.06 of its potential returns per unit of risk. ProShares SP 500 is currently generating about 0.05 per unit of risk. If you would invest 11,322 in iShares Select Dividend on August 27, 2024 and sell it today you would earn a total of 2,886 from holding iShares Select Dividend or generate 25.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Select Dividend vs. ProShares SP 500
Performance |
| Timeline |
| iShares Select Dividend |
| ProShares SP 500 |
IShares Select and ProShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Select and ProShares
The main advantage of trading using opposite IShares Select and ProShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Select position performs unexpectedly, ProShares 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 will offset losses from the drop in ProShares' long position.| IShares Select vs. SPDR SP Dividend | IShares Select vs. Vanguard Dividend Appreciation | IShares Select vs. iShares Core High | IShares Select vs. iShares Preferred and |
| ProShares vs. BlackRock ETF Trust | ProShares vs. Rbb Fund | ProShares vs. Virtus ETF Trust | ProShares vs. Amplify CWP Enhanced |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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