Correlation Between ProShares Investment and ProShares Merger
Can any of the company-specific risk be diversified away by investing in both ProShares Investment and ProShares Merger 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 ProShares Merger 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 ProShares Merger ETF, you can compare the effects of market volatilities on ProShares Investment and ProShares Merger 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 ProShares Merger. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Investment and ProShares Merger.
Diversification Opportunities for ProShares Investment and ProShares Merger
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ProShares and ProShares is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Investment GradeInte and ProShares Merger ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Merger ETF 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 ProShares Merger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Merger ETF has no effect on the direction of ProShares Investment i.e., ProShares Investment and ProShares Merger go up and down completely randomly.
Pair Corralation between ProShares Investment and ProShares Merger
Given the investment horizon of 90 days ProShares Investment GradeInterest is expected to generate 1.24 times more return on investment than ProShares Merger. However, ProShares Investment is 1.24 times more volatile than ProShares Merger ETF. It trades about 0.17 of its potential returns per unit of risk. ProShares Merger ETF is currently generating about 0.15 per unit of risk. If you would invest 6,649 in ProShares Investment GradeInterest on September 2, 2024 and sell it today you would earn a total of 1,124 from holding ProShares Investment GradeInterest or generate 16.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Investment GradeInte vs. ProShares Merger ETF
Performance |
| Timeline |
| ProShares Investment |
| ProShares Merger ETF |
ProShares Investment and ProShares Merger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Investment and ProShares Merger
The main advantage of trading using opposite ProShares Investment and ProShares Merger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Investment position performs unexpectedly, ProShares Merger 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 Merger will offset losses from the drop in ProShares Merger'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 |
| ProShares Merger vs. ProShares Hedge Replication | ProShares Merger vs. IQ Merger Arbitrage | ProShares Merger vs. ProShares Global Listed | ProShares Merger vs. ProShares Investment GradeInterest |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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