Correlation Between ProShares Trust and ARK 21Shares
Can any of the company-specific risk be diversified away by investing in both ProShares Trust and ARK 21Shares 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 Trust and ARK 21Shares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Trust and ARK 21Shares Active, you can compare the effects of market volatilities on ProShares Trust and ARK 21Shares 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 Trust with a short position of ARK 21Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Trust and ARK 21Shares.
Diversification Opportunities for ProShares Trust and ARK 21Shares
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ProShares and ARK is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Trust and ARK 21Shares Active in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARK 21Shares Active and ProShares Trust 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 Trust are associated (or correlated) with ARK 21Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARK 21Shares Active has no effect on the direction of ProShares Trust i.e., ProShares Trust and ARK 21Shares go up and down completely randomly.
Pair Corralation between ProShares Trust and ARK 21Shares
Given the investment horizon of 90 days ProShares Trust is expected to under-perform the ARK 21Shares. In addition to that, ProShares Trust is 2.02 times more volatile than ARK 21Shares Active. It trades about -0.25 of its total potential returns per unit of risk. ARK 21Shares Active is currently generating about -0.28 per unit of volatility. If you would invest 4,084 in ARK 21Shares Active on November 28, 2024 and sell it today you would lose (598.00) from holding ARK 21Shares Active or give up 14.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Trust vs. ARK 21Shares Active
Performance |
| Timeline |
| ProShares Trust |
| ARK 21Shares Active |
ProShares Trust and ARK 21Shares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Trust and ARK 21Shares
The main advantage of trading using opposite ProShares Trust and ARK 21Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Trust position performs unexpectedly, ARK 21Shares 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 ARK 21Shares will offset losses from the drop in ARK 21Shares' long position.| ProShares Trust vs. Grayscale Funds Trust | ProShares Trust vs. iShares Ethereum Trust | ProShares Trust vs. ProShares Trust | ProShares Trust vs. Grayscale Ethereum Trust |
| ARK 21Shares vs. Grayscale Funds Trust | ARK 21Shares vs. ProShares Trust | ARK 21Shares vs. iShares Ethereum Trust | ARK 21Shares vs. ProShares Trust |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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