Correlation Between ProShares Trust and Roundhill Investments
Can any of the company-specific risk be diversified away by investing in both ProShares Trust and Roundhill Investments 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 Roundhill Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Trust and Roundhill Investments, you can compare the effects of market volatilities on ProShares Trust and Roundhill Investments 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 Roundhill Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Trust and Roundhill Investments.
Diversification Opportunities for ProShares Trust and Roundhill Investments
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ProShares and Roundhill is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Trust and Roundhill Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roundhill Investments 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 Roundhill Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roundhill Investments has no effect on the direction of ProShares Trust i.e., ProShares Trust and Roundhill Investments go up and down completely randomly.
Pair Corralation between ProShares Trust and Roundhill Investments
Given the investment horizon of 90 days ProShares Trust is expected to generate 4.43 times more return on investment than Roundhill Investments. However, ProShares Trust is 4.43 times more volatile than Roundhill Investments. It trades about 0.08 of its potential returns per unit of risk. Roundhill Investments is currently generating about -0.04 per unit of risk. If you would invest 1,370 in ProShares Trust on November 2, 2024 and sell it today you would earn a total of 556.00 from holding ProShares Trust or generate 40.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 62.14% |
| Values | Daily Returns |
ProShares Trust vs. Roundhill Investments
Performance |
| Timeline |
| ProShares Trust |
| Roundhill Investments |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
ProShares Trust and Roundhill Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Trust and Roundhill Investments
The main advantage of trading using opposite ProShares Trust and Roundhill Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Trust position performs unexpectedly, Roundhill Investments 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 Roundhill Investments will offset losses from the drop in Roundhill Investments' long position.| ProShares Trust vs. ProShares Trust | ProShares Trust vs. iShares Ethereum Trust | ProShares Trust vs. ProShares Trust | ProShares Trust vs. Grayscale Ethereum 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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