Correlation Between ProShares Nasdaq and Global X
Can any of the company-specific risk be diversified away by investing in both ProShares Nasdaq and Global X 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 Nasdaq and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Nasdaq 100 High and Global X SP, you can compare the effects of market volatilities on ProShares Nasdaq and Global X 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 Nasdaq with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Nasdaq and Global X.
Diversification Opportunities for ProShares Nasdaq and Global X
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ProShares and Global is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Nasdaq 100 High and Global X SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X SP and ProShares Nasdaq 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 Nasdaq 100 High are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X SP has no effect on the direction of ProShares Nasdaq i.e., ProShares Nasdaq and Global X go up and down completely randomly.
Pair Corralation between ProShares Nasdaq and Global X
Given the investment horizon of 90 days ProShares Nasdaq 100 High is expected to generate 2.05 times more return on investment than Global X. However, ProShares Nasdaq is 2.05 times more volatile than Global X SP. It trades about 0.08 of its potential returns per unit of risk. Global X SP is currently generating about 0.15 per unit of risk. If you would invest 3,883 in ProShares Nasdaq 100 High on September 1, 2024 and sell it today you would earn a total of 440.00 from holding ProShares Nasdaq 100 High or generate 11.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
ProShares Nasdaq 100 High vs. Global X SP
Performance |
| Timeline |
| ProShares Nasdaq 100 |
| Global X SP |
ProShares Nasdaq and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Nasdaq and Global X
The main advantage of trading using opposite ProShares Nasdaq and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Nasdaq position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| ProShares Nasdaq vs. Global X SP | ProShares Nasdaq vs. Amplify CWP Enhanced | ProShares Nasdaq vs. JPMorgan Equity Premium |
| Global X vs. Global X Russell | Global X vs. Global X NASDAQ | Global X vs. NEOS ETF Trust | Global X vs. JPMorgan Equity Premium |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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