Correlation Between ProShares Ultra and Dow Jones
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and Dow Jones 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 Ultra and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Ultra MidCap400 and Dow Jones Industrial, you can compare the effects of market volatilities on ProShares Ultra and Dow Jones 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 Ultra with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and Dow Jones.
Diversification Opportunities for ProShares Ultra and Dow Jones
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ProShares and Dow is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra MidCap400 and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and ProShares Ultra 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 Ultra MidCap400 are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Dow Jones go up and down completely randomly.
Pair Corralation between ProShares Ultra and Dow Jones
Considering the 90-day investment horizon ProShares Ultra MidCap400 is expected to generate 2.92 times more return on investment than Dow Jones. However, ProShares Ultra is 2.92 times more volatile than Dow Jones Industrial. It trades about 0.06 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 4,888 in ProShares Ultra MidCap400 on August 30, 2024 and sell it today you would earn a total of 3,053 from holding ProShares Ultra MidCap400 or generate 62.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra MidCap400 vs. Dow Jones Industrial
Performance |
| Timeline |
ProShares Ultra and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
ProShares Ultra MidCap400
Pair trading matchups for ProShares Ultra
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with ProShares Ultra and Dow Jones
The main advantage of trading using opposite ProShares Ultra and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| ProShares Ultra vs. ProShares Ultra SmallCap600 | ProShares Ultra vs. ProShares Ultra Russell2000 | ProShares Ultra vs. ProShares Ultra Dow30 | ProShares Ultra vs. ProShares Ultra Industrials |
| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Stocks Directory Find actively traded stocks across global markets | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |