Correlation Between ProShares UltraShort and SPDR Bloomberg
Can any of the company-specific risk be diversified away by investing in both ProShares UltraShort and SPDR Bloomberg 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 SPDR Bloomberg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares UltraShort MSCI and SPDR Bloomberg 1 10, you can compare the effects of market volatilities on ProShares UltraShort and SPDR Bloomberg 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 SPDR Bloomberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraShort and SPDR Bloomberg.
Diversification Opportunities for ProShares UltraShort and SPDR Bloomberg
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ProShares and SPDR is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraShort MSCI and SPDR Bloomberg 1 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Bloomberg 1 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 MSCI are associated (or correlated) with SPDR Bloomberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Bloomberg 1 has no effect on the direction of ProShares UltraShort i.e., ProShares UltraShort and SPDR Bloomberg go up and down completely randomly.
Pair Corralation between ProShares UltraShort and SPDR Bloomberg
Considering the 90-day investment horizon ProShares UltraShort MSCI is expected to under-perform the SPDR Bloomberg. In addition to that, ProShares UltraShort is 11.42 times more volatile than SPDR Bloomberg 1 10. It trades about -0.12 of its total potential returns per unit of risk. SPDR Bloomberg 1 10 is currently generating about 0.28 per unit of volatility. If you would invest 1,851 in SPDR Bloomberg 1 10 on November 3, 2024 and sell it today you would earn a total of 18.00 from holding SPDR Bloomberg 1 10 or generate 0.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares UltraShort MSCI vs. SPDR Bloomberg 1 10
Performance |
| Timeline |
| ProShares UltraShort MSCI |
| SPDR Bloomberg 1 |
ProShares UltraShort and SPDR Bloomberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares UltraShort and SPDR Bloomberg
The main advantage of trading using opposite ProShares UltraShort and SPDR Bloomberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraShort position performs unexpectedly, SPDR Bloomberg 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 SPDR Bloomberg will offset losses from the drop in SPDR Bloomberg's long position.| ProShares UltraShort vs. ProShares UltraShort MSCI | ProShares UltraShort vs. ProShares Short MSCI | ProShares UltraShort vs. ProShares UltraShort MSCI | ProShares UltraShort vs. ProShares UltraShort Health |
| SPDR Bloomberg vs. SPDR Portfolio TIPS | SPDR Bloomberg vs. FlexShares iBoxx 5 Year | SPDR Bloomberg vs. FlexShares iBoxx 3 Year | SPDR Bloomberg vs. PIMCO Broad TIPS |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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