Correlation Between Proshares Russell and Schwab Short
Can any of the company-specific risk be diversified away by investing in both Proshares Russell and Schwab Short 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 Russell and Schwab Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Proshares Russell 2000 and Schwab Short Term Treasury, you can compare the effects of market volatilities on Proshares Russell and Schwab Short 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 Russell with a short position of Schwab Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Proshares Russell and Schwab Short.
Diversification Opportunities for Proshares Russell and Schwab Short
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Proshares and Schwab is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Proshares Russell 2000 and Schwab Short Term Treasury in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schwab Short Term and Proshares Russell 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 Russell 2000 are associated (or correlated) with Schwab Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schwab Short Term has no effect on the direction of Proshares Russell i.e., Proshares Russell and Schwab Short go up and down completely randomly.
Pair Corralation between Proshares Russell and Schwab Short
Given the investment horizon of 90 days Proshares Russell 2000 is expected to generate 30.46 times more return on investment than Schwab Short. However, Proshares Russell is 30.46 times more volatile than Schwab Short Term Treasury. It trades about 0.01 of its potential returns per unit of risk. Schwab Short Term Treasury is currently generating about 0.14 per unit of risk. If you would invest 3,913 in Proshares Russell 2000 on September 4, 2024 and sell it today you would lose (132.00) from holding Proshares Russell 2000 or give up 3.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 12.73% |
| Values | Daily Returns |
Proshares Russell 2000 vs. Schwab Short Term Treasury
Performance |
| Timeline |
| Proshares Russell 2000 |
| Schwab Short Term |
Proshares Russell and Schwab Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Proshares Russell and Schwab Short
The main advantage of trading using opposite Proshares Russell and Schwab Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Proshares Russell position performs unexpectedly, Schwab Short 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 Schwab Short will offset losses from the drop in Schwab Short's long position.| Proshares Russell vs. Global X SP | Proshares Russell vs. Global X NASDAQ | Proshares Russell vs. NEOS ETF Trust | Proshares Russell vs. JPMorgan Equity Premium |
| Schwab Short vs. iShares 7 10 Year | Schwab Short vs. iShares iBoxx Investment | Schwab Short vs. iShares TIPS Bond | Schwab Short vs. iShares 3 7 Year |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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