Correlation Between ProShares Merger and Simplify Exchange
Can any of the company-specific risk be diversified away by investing in both ProShares Merger and Simplify Exchange 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 Merger and Simplify Exchange into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Merger ETF and Simplify Exchange Traded, you can compare the effects of market volatilities on ProShares Merger and Simplify Exchange 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 Merger with a short position of Simplify Exchange. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Merger and Simplify Exchange.
Diversification Opportunities for ProShares Merger and Simplify Exchange
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ProShares and Simplify is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Merger ETF and Simplify Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simplify Exchange Traded and ProShares Merger 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 Merger ETF are associated (or correlated) with Simplify Exchange. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simplify Exchange Traded has no effect on the direction of ProShares Merger i.e., ProShares Merger and Simplify Exchange go up and down completely randomly.
Pair Corralation between ProShares Merger and Simplify Exchange
Given the investment horizon of 90 days ProShares Merger ETF is expected to generate 0.33 times more return on investment than Simplify Exchange. However, ProShares Merger ETF is 2.99 times less risky than Simplify Exchange. It trades about 0.17 of its potential returns per unit of risk. Simplify Exchange Traded is currently generating about -0.06 per unit of risk. If you would invest 3,998 in ProShares Merger ETF on September 2, 2024 and sell it today you would earn a total of 199.00 from holding ProShares Merger ETF or generate 4.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Merger ETF vs. Simplify Exchange Traded
Performance |
| Timeline |
| ProShares Merger ETF |
| Simplify Exchange Traded |
ProShares Merger and Simplify Exchange Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Merger and Simplify Exchange
The main advantage of trading using opposite ProShares Merger and Simplify Exchange positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Merger position performs unexpectedly, Simplify Exchange 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 Simplify Exchange will offset losses from the drop in Simplify Exchange's long position.| ProShares Merger vs. ProShares Hedge Replication | ProShares Merger vs. IQ Merger Arbitrage | ProShares Merger vs. ProShares Global Listed | ProShares Merger vs. ProShares Investment GradeInterest |
| Simplify Exchange vs. Cambria Tail Risk | Simplify Exchange vs. IQ Merger Arbitrage | Simplify Exchange vs. Amplify BlackSwan Growth | Simplify Exchange vs. AdvisorShares Dorsey Wright |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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