Correlation Between Tidal Trust and ProShares Ultra
Can any of the company-specific risk be diversified away by investing in both Tidal Trust and ProShares Ultra 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 Tidal Trust and ProShares Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tidal Trust II and ProShares Ultra Oil, you can compare the effects of market volatilities on Tidal Trust and ProShares Ultra 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 Tidal Trust with a short position of ProShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tidal Trust and ProShares Ultra.
Diversification Opportunities for Tidal Trust and ProShares Ultra
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tidal and ProShares is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust II and ProShares Ultra Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Ultra Oil and Tidal Trust 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 Tidal Trust II are associated (or correlated) with ProShares Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Ultra Oil has no effect on the direction of Tidal Trust i.e., Tidal Trust and ProShares Ultra go up and down completely randomly.
Pair Corralation between Tidal Trust and ProShares Ultra
Given the investment horizon of 90 days Tidal Trust II is expected to generate 0.39 times more return on investment than ProShares Ultra. However, Tidal Trust II is 2.6 times less risky than ProShares Ultra. It trades about 0.13 of its potential returns per unit of risk. ProShares Ultra Oil is currently generating about 0.04 per unit of risk. If you would invest 1,923 in Tidal Trust II on September 1, 2024 and sell it today you would earn a total of 304.00 from holding Tidal Trust II or generate 15.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Tidal Trust II vs. ProShares Ultra Oil
Performance |
| Timeline |
| Tidal Trust II |
| ProShares Ultra Oil |
Tidal Trust and ProShares Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tidal Trust and ProShares Ultra
The main advantage of trading using opposite Tidal Trust and ProShares Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tidal Trust position performs unexpectedly, ProShares Ultra 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 Ultra will offset losses from the drop in ProShares Ultra's long position.| Tidal Trust vs. First Trust Exchange Traded | Tidal Trust vs. Ultimus Managers Trust | Tidal Trust vs. Horizon Kinetics Medical | Tidal Trust vs. Harbor Health Care |
| ProShares Ultra vs. ProShares UltraShort Oil | ProShares Ultra vs. ProShares Ultra Basic | ProShares Ultra vs. ProShares Ultra Financials | ProShares Ultra vs. ProShares Ultra Real |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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