Correlation Between ProShares and ProShares
Can any of the company-specific risk be diversified away by investing in both ProShares and ProShares 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 and ProShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares SP Kensho and ProShares On Demand ETF, you can compare the effects of market volatilities on ProShares and ProShares 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 with a short position of ProShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares and ProShares.
Diversification Opportunities for ProShares and ProShares
Very poor diversification
The 3 months correlation between ProShares and ProShares is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding ProShares SP Kensho and ProShares On Demand ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares On Demand and ProShares 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 SP Kensho are associated (or correlated) with ProShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares On Demand has no effect on the direction of ProShares i.e., ProShares and ProShares go up and down completely randomly.
Pair Corralation between ProShares and ProShares
Given the investment horizon of 90 days ProShares is expected to generate 2.37 times less return on investment than ProShares. In addition to that, ProShares is 1.14 times more volatile than ProShares On Demand ETF. It trades about 0.04 of its total potential returns per unit of risk. ProShares On Demand ETF is currently generating about 0.1 per unit of volatility. If you would invest 2,278 in ProShares On Demand ETF on September 2, 2024 and sell it today you would earn a total of 1,198 from holding ProShares On Demand ETF or generate 52.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares SP Kensho vs. ProShares On Demand ETF
Performance |
| Timeline |
| ProShares SP Kensho |
| ProShares On Demand |
ProShares and ProShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares and ProShares
The main advantage of trading using opposite ProShares and ProShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares position performs unexpectedly, ProShares 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 will offset losses from the drop in ProShares' long position.| ProShares vs. ProShares Big Data | ProShares vs. ProShares SP Kensho | ProShares vs. ProShares Smart Materials | ProShares vs. ProShares On Demand ETF |
| ProShares vs. ProShares Smart Materials | ProShares vs. ProShares SP Kensho | ProShares vs. ProShares Big Data | ProShares vs. ProShares SP Kensho |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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