Correlation Between ProShares UltraShort and VanEck Junior
Can any of the company-specific risk be diversified away by investing in both ProShares UltraShort and VanEck Junior 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 VanEck Junior into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares UltraShort Gold and VanEck Junior Gold, you can compare the effects of market volatilities on ProShares UltraShort and VanEck Junior 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 VanEck Junior. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraShort and VanEck Junior.
Diversification Opportunities for ProShares UltraShort and VanEck Junior
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and VanEck is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraShort Gold and VanEck Junior Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Junior Gold 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 Gold are associated (or correlated) with VanEck Junior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Junior Gold has no effect on the direction of ProShares UltraShort i.e., ProShares UltraShort and VanEck Junior go up and down completely randomly.
Pair Corralation between ProShares UltraShort and VanEck Junior
Considering the 90-day investment horizon ProShares UltraShort Gold is expected to under-perform the VanEck Junior. But the etf apears to be less risky and, when comparing its historical volatility, ProShares UltraShort Gold is 1.16 times less risky than VanEck Junior. The etf trades about -0.05 of its potential returns per unit of risk. The VanEck Junior Gold is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 4,640 in VanEck Junior Gold on August 29, 2024 and sell it today you would earn a total of 27.00 from holding VanEck Junior Gold or generate 0.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares UltraShort Gold vs. VanEck Junior Gold
Performance |
| Timeline |
| ProShares UltraShort Gold |
| VanEck Junior Gold |
ProShares UltraShort and VanEck Junior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares UltraShort and VanEck Junior
The main advantage of trading using opposite ProShares UltraShort and VanEck Junior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraShort position performs unexpectedly, VanEck Junior 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 VanEck Junior will offset losses from the drop in VanEck Junior's long position.| ProShares UltraShort vs. ProShares UltraShort Silver | ProShares UltraShort vs. ProShares Ultra Gold | ProShares UltraShort vs. DB Gold Double | ProShares UltraShort vs. DB Gold Short |
| VanEck Junior vs. VanEck Gold Miners | VanEck Junior vs. Global X Silver | VanEck Junior vs. Amplify ETF Trust | VanEck Junior vs. Pan American Silver |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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