Correlation Between ProShares UltraShort and ProShares UltraShort

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both ProShares UltraShort and ProShares UltraShort 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 UltraShort and ProShares UltraShort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares UltraShort Euro and ProShares UltraShort Consumer, you can compare the effects of market volatilities on ProShares UltraShort and ProShares UltraShort 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 UltraShort with a short position of ProShares UltraShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraShort and ProShares UltraShort.

Diversification Opportunities for ProShares UltraShort and ProShares UltraShort

-0.86
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between ProShares and ProShares is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraShort Euro and ProShares UltraShort Consumer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort and ProShares UltraShort 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 UltraShort Euro are associated (or correlated) with ProShares UltraShort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares UltraShort has no effect on the direction of ProShares UltraShort i.e., ProShares UltraShort and ProShares UltraShort go up and down completely randomly.

Pair Corralation between ProShares UltraShort and ProShares UltraShort

Considering the 90-day investment horizon ProShares UltraShort Euro is expected to generate 0.36 times more return on investment than ProShares UltraShort. However, ProShares UltraShort Euro is 2.79 times less risky than ProShares UltraShort. It trades about 0.05 of its potential returns per unit of risk. ProShares UltraShort Consumer is currently generating about -0.08 per unit of risk. If you would invest  2,937  in ProShares UltraShort Euro on September 12, 2024 and sell it today you would earn a total of  435.00  from holding ProShares UltraShort Euro or generate 14.81% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

ProShares UltraShort Euro  vs.  ProShares UltraShort Consumer

 Performance 
       Timeline  
ProShares UltraShort Euro 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in ProShares UltraShort Euro are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, ProShares UltraShort may actually be approaching a critical reversion point that can send shares even higher in January 2025.
ProShares UltraShort 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days ProShares UltraShort Consumer has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Etf's fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the fund shareholders.

ProShares UltraShort and ProShares UltraShort Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ProShares UltraShort and ProShares UltraShort

The main advantage of trading using opposite ProShares UltraShort and ProShares UltraShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraShort position performs unexpectedly, ProShares UltraShort 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 UltraShort will offset losses from the drop in ProShares UltraShort's long position.
The idea behind ProShares UltraShort Euro and ProShares UltraShort Consumer pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

Other Complementary Tools

Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
ETFs
Find actively traded Exchange Traded Funds (ETF) from around the world
Volatility Analysis
Get historical volatility and risk analysis based on latest market data