Correlation Between Defiance ETFs and ProShares Online
Can any of the company-specific risk be diversified away by investing in both Defiance ETFs and ProShares Online 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 Defiance ETFs and ProShares Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Defiance ETFs and ProShares Online Retail, you can compare the effects of market volatilities on Defiance ETFs and ProShares Online 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 Defiance ETFs with a short position of ProShares Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of Defiance ETFs and ProShares Online.
Diversification Opportunities for Defiance ETFs and ProShares Online
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Defiance and ProShares is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Defiance ETFs and ProShares Online Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Online Retail and Defiance ETFs 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 Defiance ETFs are associated (or correlated) with ProShares Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Online Retail has no effect on the direction of Defiance ETFs i.e., Defiance ETFs and ProShares Online go up and down completely randomly.
Pair Corralation between Defiance ETFs and ProShares Online
Given the investment horizon of 90 days Defiance ETFs is expected to generate 1.13 times less return on investment than ProShares Online. But when comparing it to its historical volatility, Defiance ETFs is 1.43 times less risky than ProShares Online. It trades about 0.07 of its potential returns per unit of risk. ProShares Online Retail is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,094 in ProShares Online Retail on August 30, 2024 and sell it today you would earn a total of 1,524 from holding ProShares Online Retail or generate 49.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 81.62% |
| Values | Daily Returns |
Defiance ETFs vs. ProShares Online Retail
Performance |
| Timeline |
| Defiance ETFs |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ProShares Online Retail |
Defiance ETFs and ProShares Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Defiance ETFs and ProShares Online
The main advantage of trading using opposite Defiance ETFs and ProShares Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Defiance ETFs position performs unexpectedly, ProShares Online 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 Online will offset losses from the drop in ProShares Online's long position.| Defiance ETFs vs. Global X Internet | Defiance ETFs vs. First Trust NASDAQ | Defiance ETFs vs. Global X Cloud | Defiance ETFs vs. Pacer Benchmark Data |
| ProShares Online vs. Amplify Online Retail | ProShares Online vs. ProShares Long OnlineShort | ProShares Online vs. Global X E commerce | ProShares Online vs. WisdomTree Cloud Computing |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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