Correlation Between ProShares Hedge and IQ 50
Can any of the company-specific risk be diversified away by investing in both ProShares Hedge and IQ 50 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 Hedge and IQ 50 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Hedge Replication and IQ 50 Percent, you can compare the effects of market volatilities on ProShares Hedge and IQ 50 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 Hedge with a short position of IQ 50. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Hedge and IQ 50.
Diversification Opportunities for ProShares Hedge and IQ 50
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ProShares and HFXI is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Hedge Replication and IQ 50 Percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQ 50 Percent and ProShares Hedge 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 Hedge Replication are associated (or correlated) with IQ 50. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IQ 50 Percent has no effect on the direction of ProShares Hedge i.e., ProShares Hedge and IQ 50 go up and down completely randomly.
Pair Corralation between ProShares Hedge and IQ 50
Considering the 90-day investment horizon ProShares Hedge Replication is expected to generate 0.44 times more return on investment than IQ 50. However, ProShares Hedge Replication is 2.26 times less risky than IQ 50. It trades about 0.22 of its potential returns per unit of risk. IQ 50 Percent is currently generating about -0.11 per unit of risk. If you would invest 4,969 in ProShares Hedge Replication on August 31, 2024 and sell it today you would earn a total of 69.00 from holding ProShares Hedge Replication or generate 1.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
ProShares Hedge Replication vs. IQ 50 Percent
Performance |
| Timeline |
| ProShares Hedge Repl |
| IQ 50 Percent |
ProShares Hedge and IQ 50 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Hedge and IQ 50
The main advantage of trading using opposite ProShares Hedge and IQ 50 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Hedge position performs unexpectedly, IQ 50 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 IQ 50 will offset losses from the drop in IQ 50's long position.| ProShares Hedge vs. ProShares Merger ETF | ProShares Hedge vs. IQ Hedge Multi Strategy | ProShares Hedge vs. ProShares Large Cap | ProShares Hedge vs. IQ Merger Arbitrage |
| IQ 50 vs. iShares Currency Hedged | IQ 50 vs. Xtrackers MSCI All | IQ 50 vs. iShares Currency Hedged | IQ 50 vs. WisdomTree International Hedged |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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