Correlation Between IShares Trust and ProShares Ultra
Can any of the company-specific risk be diversified away by investing in both IShares 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 IShares 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 iShares Trust and ProShares Ultra MSCI, you can compare the effects of market volatilities on IShares 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 IShares Trust with a short position of ProShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Trust and ProShares Ultra.
Diversification Opportunities for IShares Trust and ProShares Ultra
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and ProShares is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and ProShares Ultra MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Ultra MSCI 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 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 MSCI has no effect on the direction of IShares Trust i.e., IShares Trust and ProShares Ultra go up and down completely randomly.
Pair Corralation between IShares Trust and ProShares Ultra
Given the investment horizon of 90 days iShares Trust is expected to generate 0.22 times more return on investment than ProShares Ultra. However, iShares Trust is 4.61 times less risky than ProShares Ultra. It trades about 0.01 of its potential returns per unit of risk. ProShares Ultra MSCI is currently generating about -0.16 per unit of risk. If you would invest 3,140 in iShares Trust on August 25, 2024 and sell it today you would earn a total of 8.00 from holding iShares Trust or generate 0.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Trust vs. ProShares Ultra MSCI
Performance |
| Timeline |
| iShares Trust |
| ProShares Ultra MSCI |
IShares Trust and ProShares Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Trust and ProShares Ultra
The main advantage of trading using opposite IShares Trust and ProShares Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares 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.| IShares Trust vs. First Trust Multi Asset | IShares Trust vs. Collaborative Investment Series | IShares Trust vs. Akros Monthly Payout | IShares Trust vs. Northern Lights |
| ProShares Ultra vs. Direxion Daily SP | ProShares Ultra vs. Direxion Daily Semiconductor | ProShares Ultra vs. Direxion Daily Semiconductor |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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