Correlation Between ProShares Equities and Dow Jones
Can any of the company-specific risk be diversified away by investing in both ProShares Equities and Dow Jones 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 Equities and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Equities for and Dow Jones Industrial, you can compare the effects of market volatilities on ProShares Equities and Dow Jones 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 Equities with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Equities and Dow Jones.
Diversification Opportunities for ProShares Equities and Dow Jones
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ProShares and Dow is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Equities for and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and ProShares Equities 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 Equities for are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of ProShares Equities i.e., ProShares Equities and Dow Jones go up and down completely randomly.
Pair Corralation between ProShares Equities and Dow Jones
Given the investment horizon of 90 days ProShares Equities for is expected to generate 1.41 times more return on investment than Dow Jones. However, ProShares Equities is 1.41 times more volatile than Dow Jones Industrial. It trades about 0.09 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.11 per unit of risk. If you would invest 4,558 in ProShares Equities for on August 27, 2024 and sell it today you would earn a total of 1,693 from holding ProShares Equities for or generate 37.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Equities for vs. Dow Jones Industrial
Performance |
| Timeline |
ProShares Equities and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
ProShares Equities for
Pair trading matchups for ProShares Equities
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with ProShares Equities and Dow Jones
The main advantage of trading using opposite ProShares Equities and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Equities position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| ProShares Equities vs. First Trust Developed | ProShares Equities vs. First Trust Indxx | ProShares Equities vs. Principal Quality ETF | ProShares Equities vs. VictoryShares Discovery Enhanced |
| Dow Jones vs. Meiwu Technology Co | Dow Jones vs. 17 Education Technology | Dow Jones vs. 51Talk Online Education | Dow Jones vs. Afya |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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