Correlation Between ProShares Merger and X Square
Can any of the company-specific risk be diversified away by investing in both ProShares Merger and X Square 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 X Square 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 X Square Balanced, you can compare the effects of market volatilities on ProShares Merger and X Square 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 X Square. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Merger and X Square.
Diversification Opportunities for ProShares Merger and X Square
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ProShares and SQCBX is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Merger ETF and X Square Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X Square Balanced 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 X Square. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X Square Balanced has no effect on the direction of ProShares Merger i.e., ProShares Merger and X Square go up and down completely randomly.
Pair Corralation between ProShares Merger and X Square
Given the investment horizon of 90 days ProShares Merger ETF is expected to generate 0.23 times more return on investment than X Square. However, ProShares Merger ETF is 4.36 times less risky than X Square. It trades about 0.49 of its potential returns per unit of risk. X Square Balanced is currently generating about 0.06 per unit of risk. If you would invest 4,104 in ProShares Merger ETF on October 25, 2024 and sell it today you would earn a total of 53.00 from holding ProShares Merger ETF or generate 1.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Merger ETF vs. X Square Balanced
Performance |
| Timeline |
| ProShares Merger ETF |
| X Square Balanced |
ProShares Merger and X Square Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Merger and X Square
The main advantage of trading using opposite ProShares Merger and X Square positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Merger position performs unexpectedly, X Square 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 X Square will offset losses from the drop in X Square'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 |
| X Square vs. FT Vest Equity | X Square vs. Zillow Group Class | X Square vs. Northern Lights | X Square vs. VanEck Vectors Moodys |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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