Correlation Between AltShares Event and ProShares Hedge
Can any of the company-specific risk be diversified away by investing in both AltShares Event and ProShares Hedge 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 AltShares Event and ProShares Hedge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AltShares Event Driven ETF and ProShares Hedge Replication, you can compare the effects of market volatilities on AltShares Event and ProShares Hedge 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 AltShares Event with a short position of ProShares Hedge. Check out your portfolio center. Please also check ongoing floating volatility patterns of AltShares Event and ProShares Hedge.
Diversification Opportunities for AltShares Event and ProShares Hedge
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between AltShares and ProShares is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding AltShares Event Driven ETF and ProShares Hedge Replication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Hedge Repl and AltShares Event 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 AltShares Event Driven ETF are associated (or correlated) with ProShares Hedge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Hedge Repl has no effect on the direction of AltShares Event i.e., AltShares Event and ProShares Hedge go up and down completely randomly.
Pair Corralation between AltShares Event and ProShares Hedge
Given the investment horizon of 90 days AltShares Event Driven ETF is expected to generate 1.37 times more return on investment than ProShares Hedge. However, AltShares Event is 1.37 times more volatile than ProShares Hedge Replication. It trades about 0.08 of its potential returns per unit of risk. ProShares Hedge Replication is currently generating about 0.1 per unit of risk. If you would invest 979.00 in AltShares Event Driven ETF on September 14, 2024 and sell it today you would earn a total of 98.00 from holding AltShares Event Driven ETF or generate 10.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AltShares Event Driven ETF vs. ProShares Hedge Replication
Performance |
| Timeline |
| AltShares Event Driven |
| ProShares Hedge Repl |
AltShares Event and ProShares Hedge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AltShares Event and ProShares Hedge
The main advantage of trading using opposite AltShares Event and ProShares Hedge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AltShares Event position performs unexpectedly, ProShares Hedge 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 Hedge will offset losses from the drop in ProShares Hedge's long position.| AltShares Event vs. ProShares Hedge Replication | AltShares Event vs. IQ Merger Arbitrage | AltShares Event vs. ProShares Global Listed | AltShares Event vs. ProShares Investment GradeInterest |
| ProShares Hedge vs. ProShares Merger ETF | ProShares Hedge vs. IQ Hedge Multi Strategy | ProShares Hedge vs. ProShares Large Cap | ProShares Hedge vs. IQ Merger Arbitrage |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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