Correlation Between Global X and ProShares Ultra
Can any of the company-specific risk be diversified away by investing in both Global X and ProShares Ultra 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 Global X and ProShares Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X MLP and ProShares Ultra Bloomberg, you can compare the effects of market volatilities on Global X and ProShares Ultra 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 Global X with a short position of ProShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and ProShares Ultra.
Diversification Opportunities for Global X and ProShares Ultra
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and ProShares is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Global X MLP and ProShares Ultra Bloomberg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Ultra Bloomberg and Global X 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 Global X MLP are associated (or correlated) with ProShares Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Ultra Bloomberg has no effect on the direction of Global X i.e., Global X and ProShares Ultra go up and down completely randomly.
Pair Corralation between Global X and ProShares Ultra
Given the investment horizon of 90 days Global X MLP is expected to generate 0.15 times more return on investment than ProShares Ultra. However, Global X MLP is 6.82 times less risky than ProShares Ultra. It trades about 0.1 of its potential returns per unit of risk. ProShares Ultra Bloomberg is currently generating about -0.08 per unit of risk. If you would invest 3,664 in Global X MLP on September 20, 2024 and sell it today you would earn a total of 2,158 from holding Global X MLP or generate 58.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X MLP vs. ProShares Ultra Bloomberg
Performance |
| Timeline |
| Global X MLP |
| ProShares Ultra Bloomberg |
Global X and ProShares Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and ProShares Ultra
The main advantage of trading using opposite Global X and ProShares Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, ProShares Ultra 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 Ultra will offset losses from the drop in ProShares Ultra's long position.| Global X vs. Global X MLP | Global X vs. Alerian Energy Infrastructure | Global X vs. First Trust North | Global X vs. Tortoise North American |
| ProShares Ultra vs. Ultimus Managers Trust | ProShares Ultra vs. Direxion Daily SP | ProShares Ultra vs. EA Series Trust | ProShares Ultra vs. Global X MLP |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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