Correlation Between IShares Trust and ProShares UltraShort
Can any of the company-specific risk be diversified away by investing in both IShares Trust and ProShares UltraShort 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 Trust and ProShares UltraShort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Trust and ProShares UltraShort Gold, you can compare the effects of market volatilities on IShares Trust and ProShares UltraShort 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 Trust with a short position of ProShares UltraShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Trust and ProShares UltraShort.
Diversification Opportunities for IShares Trust and ProShares UltraShort
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and ProShares is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and ProShares UltraShort Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort Gold and IShares 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 iShares Trust are associated (or correlated) with ProShares UltraShort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares UltraShort Gold has no effect on the direction of IShares Trust i.e., IShares Trust and ProShares UltraShort go up and down completely randomly.
Pair Corralation between IShares Trust and ProShares UltraShort
Given the investment horizon of 90 days iShares Trust is expected to generate 0.31 times more return on investment than ProShares UltraShort. However, iShares Trust is 3.28 times less risky than ProShares UltraShort. It trades about 0.12 of its potential returns per unit of risk. ProShares UltraShort Gold is currently generating about -0.08 per unit of risk. If you would invest 2,906 in iShares Trust on August 31, 2024 and sell it today you would earn a total of 282.00 from holding iShares Trust or generate 9.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Trust vs. ProShares UltraShort Gold
Performance |
| Timeline |
| iShares Trust |
| ProShares UltraShort Gold |
IShares Trust and ProShares UltraShort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Trust and ProShares UltraShort
The main advantage of trading using opposite IShares Trust and ProShares UltraShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Trust position performs unexpectedly, ProShares UltraShort 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 UltraShort will offset losses from the drop in ProShares UltraShort's long position.| IShares Trust vs. Prime Medicine, Common | IShares Trust vs. Harbor ETF Trust | IShares Trust vs. IQ Healthy Hearts | IShares Trust vs. DBX ETF Trust |
| ProShares UltraShort vs. ProShares UltraShort Bloomberg | ProShares UltraShort vs. ProShares UltraShort Silver | ProShares UltraShort vs. MicroSectors Gold Miners | ProShares UltraShort vs. UBS ETRACS |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |