Correlation Between ProShares MSCI and ProShares MSCI
Can any of the company-specific risk be diversified away by investing in both ProShares MSCI and ProShares MSCI 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 MSCI and ProShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares MSCI Europe and ProShares MSCI EAFE, you can compare the effects of market volatilities on ProShares MSCI and ProShares MSCI 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 MSCI with a short position of ProShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares MSCI and ProShares MSCI.
Diversification Opportunities for ProShares MSCI and ProShares MSCI
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ProShares and ProShares is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding ProShares MSCI Europe and ProShares MSCI EAFE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares MSCI EAFE and ProShares MSCI 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 MSCI Europe are associated (or correlated) with ProShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares MSCI EAFE has no effect on the direction of ProShares MSCI i.e., ProShares MSCI and ProShares MSCI go up and down completely randomly.
Pair Corralation between ProShares MSCI and ProShares MSCI
Given the investment horizon of 90 days ProShares MSCI Europe is expected to under-perform the ProShares MSCI. In addition to that, ProShares MSCI is 1.15 times more volatile than ProShares MSCI EAFE. It trades about -0.26 of its total potential returns per unit of risk. ProShares MSCI EAFE is currently generating about -0.23 per unit of volatility. If you would invest 3,950 in ProShares MSCI EAFE on August 24, 2024 and sell it today you would lose (144.00) from holding ProShares MSCI EAFE or give up 3.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares MSCI Europe vs. ProShares MSCI EAFE
Performance |
| Timeline |
| ProShares MSCI Europe |
| ProShares MSCI EAFE |
ProShares MSCI and ProShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares MSCI and ProShares MSCI
The main advantage of trading using opposite ProShares MSCI and ProShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares MSCI position performs unexpectedly, ProShares MSCI 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 MSCI will offset losses from the drop in ProShares MSCI's long position.| ProShares MSCI vs. ProShares MSCI EAFE | ProShares MSCI vs. ProShares MSCI Emerging | ProShares MSCI vs. ProShares SP MidCap | ProShares MSCI vs. ProShares Russell 2000 |
| ProShares MSCI vs. iShares ESG Advanced | ProShares MSCI vs. iShares ESG Advanced | ProShares MSCI vs. iShares ESG Aware | ProShares MSCI vs. iShares ESG Aware |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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