Correlation Between IShares Expanded and ProShares
Can any of the company-specific risk be diversified away by investing in both IShares Expanded and ProShares 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 IShares Expanded and ProShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Expanded Tech Software and ProShares SP Technology, you can compare the effects of market volatilities on IShares Expanded and ProShares 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 IShares Expanded with a short position of ProShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Expanded and ProShares.
Diversification Opportunities for IShares Expanded and ProShares
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and ProShares is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding iShares Expanded Tech Software and ProShares SP Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares SP Technology and IShares Expanded 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 iShares Expanded Tech Software are associated (or correlated) with ProShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares SP Technology has no effect on the direction of IShares Expanded i.e., IShares Expanded and ProShares go up and down completely randomly.
Pair Corralation between IShares Expanded and ProShares
Considering the 90-day investment horizon iShares Expanded Tech Software is expected to generate 1.25 times more return on investment than ProShares. However, IShares Expanded is 1.25 times more volatile than ProShares SP Technology. It trades about 0.44 of its potential returns per unit of risk. ProShares SP Technology is currently generating about 0.06 per unit of risk. If you would invest 9,220 in iShares Expanded Tech Software on August 26, 2024 and sell it today you would earn a total of 1,384 from holding iShares Expanded Tech Software or generate 15.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Expanded Tech Software vs. ProShares SP Technology
Performance |
| Timeline |
| iShares Expanded Tech |
| ProShares SP Technology |
IShares Expanded and ProShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Expanded and ProShares
The main advantage of trading using opposite IShares Expanded and ProShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Expanded position performs unexpectedly, ProShares 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 will offset losses from the drop in ProShares' long position.| IShares Expanded vs. First Trust Exchange Traded | IShares Expanded vs. Ultimus Managers Trust | IShares Expanded vs. Horizon Kinetics Medical | IShares Expanded vs. Harbor Health Care |
| ProShares vs. Invesco DWA Utilities | ProShares vs. Invesco Dynamic Large | ProShares vs. Invesco Dynamic Large | ProShares vs. HUMANA INC |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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