Correlation Between VanEck Junior and ProShares UltraShort
Can any of the company-specific risk be diversified away by investing in both VanEck Junior 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 VanEck Junior and ProShares UltraShort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Junior Gold and ProShares UltraShort Silver, you can compare the effects of market volatilities on VanEck Junior 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 VanEck Junior with a short position of ProShares UltraShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Junior and ProShares UltraShort.
Diversification Opportunities for VanEck Junior and ProShares UltraShort
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between VanEck and ProShares is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Junior Gold and ProShares UltraShort Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort and VanEck Junior 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 VanEck Junior Gold 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 VanEck Junior i.e., VanEck Junior and ProShares UltraShort go up and down completely randomly.
Pair Corralation between VanEck Junior and ProShares UltraShort
Given the investment horizon of 90 days VanEck Junior Gold is expected to under-perform the ProShares UltraShort. But the etf apears to be less risky and, when comparing its historical volatility, VanEck Junior Gold is 1.62 times less risky than ProShares UltraShort. The etf trades about -0.21 of its potential returns per unit of risk. The ProShares UltraShort Silver is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 3,204 in ProShares UltraShort Silver on August 25, 2024 and sell it today you would earn a total of 481.00 from holding ProShares UltraShort Silver or generate 15.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Junior Gold vs. ProShares UltraShort Silver
Performance |
| Timeline |
| VanEck Junior Gold |
| ProShares UltraShort |
VanEck Junior and ProShares UltraShort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Junior and ProShares UltraShort
The main advantage of trading using opposite VanEck Junior and ProShares UltraShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Junior 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.| VanEck Junior vs. iShares Silver Trust | VanEck Junior vs. SPDR Gold Shares | VanEck Junior vs. Newmont Goldcorp Corp | VanEck Junior vs. Direxion Daily Gold |
| ProShares UltraShort vs. DB Gold Short | ProShares UltraShort vs. DB Gold Double | ProShares UltraShort vs. ProShares UltraShort Gold | ProShares UltraShort vs. ProShares UltraShort Basic |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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