Correlation Between Proshares Russell and SPDR Barclays
Can any of the company-specific risk be diversified away by investing in both Proshares Russell and SPDR Barclays 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 SPDR Barclays 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 SPDR Barclays Intermediate, you can compare the effects of market volatilities on Proshares Russell and SPDR Barclays 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 SPDR Barclays. Check out your portfolio center. Please also check ongoing floating volatility patterns of Proshares Russell and SPDR Barclays.
Diversification Opportunities for Proshares Russell and SPDR Barclays
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Proshares and SPDR is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Proshares Russell 2000 and SPDR Barclays Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Barclays Interm 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 SPDR Barclays. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Barclays Interm has no effect on the direction of Proshares Russell i.e., Proshares Russell and SPDR Barclays go up and down completely randomly.
Pair Corralation between Proshares Russell and SPDR Barclays
Given the investment horizon of 90 days Proshares Russell 2000 is expected to generate 4.71 times more return on investment than SPDR Barclays. However, Proshares Russell is 4.71 times more volatile than SPDR Barclays Intermediate. It trades about 0.22 of its potential returns per unit of risk. SPDR Barclays Intermediate is currently generating about 0.07 per unit of risk. If you would invest 4,159 in Proshares Russell 2000 on August 30, 2024 and sell it today you would earn a total of 253.00 from holding Proshares Russell 2000 or generate 6.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Proshares Russell 2000 vs. SPDR Barclays Intermediate
Performance |
| Timeline |
| Proshares Russell 2000 |
| SPDR Barclays Interm |
Proshares Russell and SPDR Barclays Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Proshares Russell and SPDR Barclays
The main advantage of trading using opposite Proshares Russell and SPDR Barclays positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Proshares Russell position performs unexpectedly, SPDR Barclays 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 SPDR Barclays will offset losses from the drop in SPDR Barclays' long position.| Proshares Russell vs. Freedom Day Dividend | Proshares Russell vs. Franklin Templeton ETF | Proshares Russell vs. iShares MSCI China | Proshares Russell vs. Tidal Trust II |
| SPDR Barclays vs. SPDR Barclays Short | SPDR Barclays vs. SPDR Bloomberg Emerging | SPDR Barclays vs. SPDR Barclays Long | SPDR Barclays vs. SPDR Barclays Short |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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