Correlation Between ProShares Hedge and ProShares Global
Can any of the company-specific risk be diversified away by investing in both ProShares Hedge and ProShares Global 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 ProShares Global 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 ProShares Global Listed, you can compare the effects of market volatilities on ProShares Hedge and ProShares Global 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 ProShares Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Hedge and ProShares Global.
Diversification Opportunities for ProShares Hedge and ProShares Global
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ProShares and ProShares is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Hedge Replication and ProShares Global Listed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Global Listed 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 ProShares Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Global Listed has no effect on the direction of ProShares Hedge i.e., ProShares Hedge and ProShares Global go up and down completely randomly.
Pair Corralation between ProShares Hedge and ProShares Global
Considering the 90-day investment horizon ProShares Hedge is expected to generate 3.51 times less return on investment than ProShares Global. But when comparing it to its historical volatility, ProShares Hedge Replication is 2.74 times less risky than ProShares Global. It trades about 0.25 of its potential returns per unit of risk. ProShares Global Listed is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 2,757 in ProShares Global Listed on September 4, 2024 and sell it today you would earn a total of 136.00 from holding ProShares Global Listed or generate 4.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
ProShares Hedge Replication vs. ProShares Global Listed
Performance |
| Timeline |
| ProShares Hedge Repl |
| ProShares Global Listed |
ProShares Hedge and ProShares Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Hedge and ProShares Global
The main advantage of trading using opposite ProShares Hedge and ProShares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Hedge position performs unexpectedly, ProShares Global 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 Global will offset losses from the drop in ProShares Global'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 |
| ProShares Global vs. Managed Account Series | ProShares Global vs. Fidelity Sai International | ProShares Global vs. Schwab Strategic Trust | ProShares Global vs. Inpex Corp ADR |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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