Correlation Between HP and ProShares VIX
Can any of the company-specific risk be diversified away by investing in both HP and ProShares VIX 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 HP and ProShares VIX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HP Inc and ProShares VIX Mid Term, you can compare the effects of market volatilities on HP and ProShares VIX 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 HP with a short position of ProShares VIX. Check out your portfolio center. Please also check ongoing floating volatility patterns of HP and ProShares VIX.
Diversification Opportunities for HP and ProShares VIX
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HP and ProShares is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding HP Inc and ProShares VIX Mid Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares VIX Mid and HP 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 HP Inc are associated (or correlated) with ProShares VIX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares VIX Mid has no effect on the direction of HP i.e., HP and ProShares VIX go up and down completely randomly.
Pair Corralation between HP and ProShares VIX
Considering the 90-day investment horizon HP Inc is expected to generate 0.72 times more return on investment than ProShares VIX. However, HP Inc is 1.38 times less risky than ProShares VIX. It trades about 0.06 of its potential returns per unit of risk. ProShares VIX Mid Term is currently generating about 0.02 per unit of risk. If you would invest 3,262 in HP Inc on August 24, 2024 and sell it today you would earn a total of 529.00 from holding HP Inc or generate 16.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HP Inc vs. ProShares VIX Mid Term
Performance |
| Timeline |
| HP Inc |
| ProShares VIX Mid |
HP and ProShares VIX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HP and ProShares VIX
The main advantage of trading using opposite HP and ProShares VIX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HP position performs unexpectedly, ProShares VIX 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 VIX will offset losses from the drop in ProShares VIX's long position.The idea behind HP Inc and ProShares VIX Mid Term pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| ProShares VIX vs. iPath Series B | ProShares VIX vs. ProShares VIX Short Term | ProShares VIX vs. ProShares Short VIX | ProShares VIX vs. ProShares Ultra 20 |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Commodity Directory Find actively traded commodities issued by global exchanges |