Correlation Between IShares Core and ProShares Trust
Can any of the company-specific risk be diversified away by investing in both IShares Core and ProShares Trust 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 Core and ProShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core SP and ProShares Trust, you can compare the effects of market volatilities on IShares Core and ProShares Trust 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 Core with a short position of ProShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and ProShares Trust.
Diversification Opportunities for IShares Core and ProShares Trust
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IShares and ProShares is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and ProShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Trust and IShares Core 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 Core SP are associated (or correlated) with ProShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Trust has no effect on the direction of IShares Core i.e., IShares Core and ProShares Trust go up and down completely randomly.
Pair Corralation between IShares Core and ProShares Trust
Considering the 90-day investment horizon IShares Core is expected to generate 78.13 times less return on investment than ProShares Trust. But when comparing it to its historical volatility, iShares Core SP is 120.29 times less risky than ProShares Trust. It trades about 0.14 of its potential returns per unit of risk. ProShares Trust is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 0.00 in ProShares Trust on August 30, 2024 and sell it today you would earn a total of 2,108 from holding ProShares Trust or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 30.96% |
| Values | Daily Returns |
iShares Core SP vs. ProShares Trust
Performance |
| Timeline |
| iShares Core SP |
| ProShares Trust |
IShares Core and ProShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and ProShares Trust
The main advantage of trading using opposite IShares Core and ProShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, ProShares Trust 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 Trust will offset losses from the drop in ProShares Trust's long position.| IShares Core vs. iShares Core SP | IShares Core vs. iShares Core SP | IShares Core vs. iShares SP 500 | IShares Core vs. iShares Russell 2000 |
| ProShares Trust vs. Vanguard Total Stock | ProShares Trust vs. SPDR SP 500 | ProShares Trust vs. iShares Core SP | ProShares Trust vs. Vanguard Total Bond |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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