Correlation Between Tidal Trust and ProShares UltraPro
Can any of the company-specific risk be diversified away by investing in both Tidal Trust and ProShares UltraPro 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 UltraPro 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 UltraPro SP500, you can compare the effects of market volatilities on Tidal Trust and ProShares UltraPro 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 UltraPro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tidal Trust and ProShares UltraPro.
Diversification Opportunities for Tidal Trust and ProShares UltraPro
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tidal and ProShares is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust II and ProShares UltraPro SP500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraPro SP500 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 UltraPro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares UltraPro SP500 has no effect on the direction of Tidal Trust i.e., Tidal Trust and ProShares UltraPro go up and down completely randomly.
Pair Corralation between Tidal Trust and ProShares UltraPro
Given the investment horizon of 90 days Tidal Trust is expected to generate 3.81 times less return on investment than ProShares UltraPro. But when comparing it to its historical volatility, Tidal Trust II is 2.46 times less risky than ProShares UltraPro. It trades about 0.06 of its potential returns per unit of risk. ProShares UltraPro SP500 is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,526 in ProShares UltraPro SP500 on August 27, 2024 and sell it today you would earn a total of 5,868 from holding ProShares UltraPro SP500 or generate 166.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 42.74% |
| Values | Daily Returns |
Tidal Trust II vs. ProShares UltraPro SP500
Performance |
| Timeline |
| Tidal Trust II |
| ProShares UltraPro SP500 |
Tidal Trust and ProShares UltraPro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tidal Trust and ProShares UltraPro
The main advantage of trading using opposite Tidal Trust and ProShares UltraPro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tidal Trust position performs unexpectedly, ProShares UltraPro 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 UltraPro will offset losses from the drop in ProShares UltraPro'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 UltraPro vs. ProShares UltraPro Dow30 | ProShares UltraPro vs. ProShares UltraPro Short | ProShares UltraPro vs. ProShares UltraPro QQQ | ProShares UltraPro vs. Direxion Daily Small |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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