Correlation Between IShares Global and ProShares Online
Can any of the company-specific risk be diversified away by investing in both IShares Global and ProShares Online 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 Global and ProShares Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Global Consumer and ProShares Online Retail, you can compare the effects of market volatilities on IShares Global and ProShares Online 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 Global with a short position of ProShares Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Global and ProShares Online.
Diversification Opportunities for IShares Global and ProShares Online
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and ProShares is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding iShares Global Consumer and ProShares Online Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Online Retail and IShares Global 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 Global Consumer are associated (or correlated) with ProShares Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Online Retail has no effect on the direction of IShares Global i.e., IShares Global and ProShares Online go up and down completely randomly.
Pair Corralation between IShares Global and ProShares Online
Considering the 90-day investment horizon IShares Global is expected to generate 3.18 times less return on investment than ProShares Online. But when comparing it to its historical volatility, iShares Global Consumer is 2.25 times less risky than ProShares Online. It trades about 0.07 of its potential returns per unit of risk. ProShares Online Retail is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,347 in ProShares Online Retail on August 27, 2024 and sell it today you would earn a total of 1,146 from holding ProShares Online Retail or generate 34.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Global Consumer vs. ProShares Online Retail
Performance |
| Timeline |
| iShares Global Consumer |
| ProShares Online Retail |
IShares Global and ProShares Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Global and ProShares Online
The main advantage of trading using opposite IShares Global and ProShares Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Global position performs unexpectedly, ProShares Online 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 Online will offset losses from the drop in ProShares Online's long position.| IShares Global vs. Vanguard Consumer Discretionary | IShares Global vs. Vanguard Utilities Index | IShares Global vs. Vanguard Industrials Index | IShares Global vs. Vanguard Materials Index |
| ProShares Online vs. Amplify Online Retail | ProShares Online vs. ProShares Long OnlineShort | ProShares Online vs. Global X E commerce | ProShares Online vs. WisdomTree Cloud Computing |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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