Correlation Between ProShares MSCI and ProShares Investment
Can any of the company-specific risk be diversified away by investing in both ProShares MSCI and ProShares Investment 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 Investment 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 Investment GradeInterest, you can compare the effects of market volatilities on ProShares MSCI and ProShares Investment 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 Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares MSCI and ProShares Investment.
Diversification Opportunities for ProShares MSCI and ProShares Investment
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and ProShares is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding ProShares MSCI Europe and ProShares Investment GradeInte in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Investment 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 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Investment has no effect on the direction of ProShares MSCI i.e., ProShares MSCI and ProShares Investment go up and down completely randomly.
Pair Corralation between ProShares MSCI and ProShares Investment
Given the investment horizon of 90 days ProShares MSCI Europe is expected to generate 3.35 times more return on investment than ProShares Investment. However, ProShares MSCI is 3.35 times more volatile than ProShares Investment GradeInterest. It trades about 0.17 of its potential returns per unit of risk. ProShares Investment GradeInterest is currently generating about 0.1 per unit of risk. If you would invest 4,694 in ProShares MSCI Europe on October 25, 2024 and sell it today you would earn a total of 127.00 from holding ProShares MSCI Europe or generate 2.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares MSCI Europe vs. ProShares Investment GradeInte
Performance |
| Timeline |
| ProShares MSCI Europe |
| ProShares Investment |
ProShares MSCI and ProShares Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares MSCI and ProShares Investment
The main advantage of trading using opposite ProShares MSCI and ProShares Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares MSCI position performs unexpectedly, ProShares Investment 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 Investment will offset losses from the drop in ProShares Investment'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 Investment vs. ProShares High YieldInterest | ProShares Investment vs. iShares Interest Rate | ProShares Investment vs. WisdomTree Interest Rate | ProShares Investment vs. iShares Interest Rate |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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