Correlation Between ProShares Investment and IShares Interest
Can any of the company-specific risk be diversified away by investing in both ProShares Investment and IShares Interest 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 Investment and IShares Interest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Investment GradeInterest and iShares Interest Rate, you can compare the effects of market volatilities on ProShares Investment and IShares Interest 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 Investment with a short position of IShares Interest. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Investment and IShares Interest.
Diversification Opportunities for ProShares Investment and IShares Interest
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ProShares and IShares is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Investment GradeInte and iShares Interest Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Interest Rate and ProShares Investment 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 Investment GradeInterest are associated (or correlated) with IShares Interest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Interest Rate has no effect on the direction of ProShares Investment i.e., ProShares Investment and IShares Interest go up and down completely randomly.
Pair Corralation between ProShares Investment and IShares Interest
Given the investment horizon of 90 days ProShares Investment is expected to generate 2.06 times less return on investment than IShares Interest. In addition to that, ProShares Investment is 1.71 times more volatile than iShares Interest Rate. It trades about 0.06 of its total potential returns per unit of risk. iShares Interest Rate is currently generating about 0.23 per unit of volatility. If you would invest 8,606 in iShares Interest Rate on August 31, 2024 and sell it today you would earn a total of 94.00 from holding iShares Interest Rate or generate 1.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Investment GradeInte vs. iShares Interest Rate
Performance |
| Timeline |
| ProShares Investment |
| iShares Interest Rate |
ProShares Investment and IShares Interest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Investment and IShares Interest
The main advantage of trading using opposite ProShares Investment and IShares Interest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Investment position performs unexpectedly, IShares Interest 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 IShares Interest will offset losses from the drop in IShares Interest's long position.| ProShares Investment vs. ProShares High YieldInterest | ProShares Investment vs. iShares Interest Rate | ProShares Investment vs. WisdomTree Interest Rate | ProShares Investment vs. iShares Interest Rate |
| IShares Interest vs. VanEck Vectors Moodys | IShares Interest vs. BondBloxx ETF Trust | IShares Interest vs. Vanguard ESG Corporate | IShares Interest vs. Vanguard Intermediate Term Corporate |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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