Correlation Between T Rex and ProShares Trust
Can any of the company-specific risk be diversified away by investing in both T Rex and ProShares Trust 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 T Rex and ProShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between T Rex 2X Inverse and ProShares Trust, you can compare the effects of market volatilities on T Rex and ProShares Trust 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 T Rex with a short position of ProShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of T Rex and ProShares Trust.
Diversification Opportunities for T Rex and ProShares Trust
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between ETQ and ProShares is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding T Rex 2X Inverse and ProShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Trust and T Rex 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 T Rex 2X Inverse are associated (or correlated) with ProShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Trust has no effect on the direction of T Rex i.e., T Rex and ProShares Trust go up and down completely randomly.
Pair Corralation between T Rex and ProShares Trust
Considering the 90-day investment horizon T Rex 2X Inverse is expected to under-perform the ProShares Trust. In addition to that, T Rex is 1.94 times more volatile than ProShares Trust. It trades about -0.16 of its total potential returns per unit of risk. ProShares Trust is currently generating about 0.14 per unit of volatility. If you would invest 6,774 in ProShares Trust on September 12, 2024 and sell it today you would earn a total of 851.00 from holding ProShares Trust or generate 12.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
T Rex 2X Inverse vs. ProShares Trust
Performance |
| Timeline |
| T Rex 2X |
| ProShares Trust |
T Rex and ProShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with T Rex and ProShares Trust
The main advantage of trading using opposite T Rex and ProShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T Rex position performs unexpectedly, ProShares Trust 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 Trust will offset losses from the drop in ProShares Trust's long position.| T Rex vs. ProShares Trust | T Rex vs. iShares Ethereum Trust | T Rex vs. ProShares Trust | T Rex vs. Grayscale Ethereum Trust |
| ProShares Trust vs. iShares Ethereum Trust | ProShares Trust vs. ProShares Trust | ProShares Trust vs. Grayscale Ethereum Trust | ProShares Trust 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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