Correlation Between IShares Trust and ProShares Trust
Can any of the company-specific risk be diversified away by investing in both IShares Trust 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 Trust 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 Trust and ProShares Trust , you can compare the effects of market volatilities on IShares Trust 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 Trust with a short position of ProShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Trust and ProShares Trust.
Diversification Opportunities for IShares Trust and ProShares Trust
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and ProShares is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and ProShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Trust 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 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 Trust i.e., IShares Trust and ProShares Trust go up and down completely randomly.
Pair Corralation between IShares Trust and ProShares Trust
Assuming the 90 days trading horizon iShares Trust is expected to generate 1.04 times more return on investment than ProShares Trust. However, IShares Trust is 1.04 times more volatile than ProShares Trust . It trades about 0.38 of its potential returns per unit of risk. ProShares Trust is currently generating about 0.32 per unit of risk. If you would invest 214,500 in iShares Trust on September 2, 2024 and sell it today you would earn a total of 38,494 from holding iShares Trust or generate 17.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Trust vs. ProShares Trust
Performance |
| Timeline |
| iShares Trust |
| ProShares Trust |
IShares Trust and ProShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Trust and ProShares Trust
The main advantage of trading using opposite IShares Trust and ProShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Trust 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 Trust vs. Promotora y Operadora | IShares Trust vs. UnitedHealth Group Incorporated | IShares Trust vs. Qulitas Controladora SAB | IShares Trust vs. Hoteles City Express |
| ProShares Trust vs. The Select Sector | ProShares Trust vs. Promotora y Operadora | ProShares Trust vs. iShares Global Timber | ProShares Trust vs. SPDR Series Trust |
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.
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