Correlation Between ProShares UltraShort and ProShares Ultra
Can any of the company-specific risk be diversified away by investing in both ProShares UltraShort and ProShares Ultra 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 ProShares Ultra 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 ProShares Ultra Gold, you can compare the effects of market volatilities on ProShares UltraShort and ProShares Ultra 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 ProShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraShort and ProShares Ultra.
Diversification Opportunities for ProShares UltraShort and ProShares Ultra
-1.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and ProShares is -1.0. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraShort Gold and ProShares Ultra Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Ultra 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 ProShares Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Ultra Gold has no effect on the direction of ProShares UltraShort i.e., ProShares UltraShort and ProShares Ultra go up and down completely randomly.
Pair Corralation between ProShares UltraShort and ProShares Ultra
Considering the 90-day investment horizon ProShares UltraShort Gold is expected to generate 0.98 times more return on investment than ProShares Ultra. However, ProShares UltraShort Gold is 1.02 times less risky than ProShares Ultra. It trades about 0.15 of its potential returns per unit of risk. ProShares Ultra Gold is currently generating about -0.14 per unit of risk. If you would invest 1,605 in ProShares UltraShort Gold on August 28, 2024 and sell it today you would earn a total of 137.00 from holding ProShares UltraShort Gold or generate 8.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares UltraShort Gold vs. ProShares Ultra Gold
Performance |
| Timeline |
| ProShares UltraShort Gold |
| ProShares Ultra Gold |
ProShares UltraShort and ProShares Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares UltraShort and ProShares Ultra
The main advantage of trading using opposite ProShares UltraShort and ProShares Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraShort position performs unexpectedly, ProShares Ultra 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 Ultra will offset losses from the drop in ProShares Ultra'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 |
| ProShares Ultra vs. ProShares UltraShort Gold | ProShares Ultra vs. ProShares Ultra Silver | ProShares Ultra vs. ProShares UltraShort Silver | ProShares Ultra vs. DB Gold Double |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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