Correlation Between ProShares and ProShares MSCI
Can any of the company-specific risk be diversified away by investing in both ProShares and ProShares MSCI 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 MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares SP 500 and ProShares MSCI Europe, you can compare the effects of market volatilities on ProShares and ProShares MSCI 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 MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares and ProShares MSCI.
Diversification Opportunities for ProShares and ProShares MSCI
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between ProShares and ProShares is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding ProShares SP 500 and ProShares MSCI Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares MSCI Europe 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 500 are associated (or correlated) with ProShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares MSCI Europe has no effect on the direction of ProShares i.e., ProShares and ProShares MSCI go up and down completely randomly.
Pair Corralation between ProShares and ProShares MSCI
Given the investment horizon of 90 days ProShares is expected to generate 1.1 times less return on investment than ProShares MSCI. But when comparing it to its historical volatility, ProShares SP 500 is 1.13 times less risky than ProShares MSCI. It trades about 0.05 of its potential returns per unit of risk. ProShares MSCI Europe is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,943 in ProShares MSCI Europe on August 27, 2024 and sell it today you would earn a total of 881.00 from holding ProShares MSCI Europe or generate 22.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares SP 500 vs. ProShares MSCI Europe
Performance |
| Timeline |
| ProShares SP 500 |
| ProShares MSCI Europe |
ProShares and ProShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares and ProShares MSCI
The main advantage of trading using opposite ProShares and ProShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares position performs unexpectedly, ProShares MSCI 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 MSCI will offset losses from the drop in ProShares MSCI's long position.| ProShares vs. BlackRock ETF Trust | ProShares vs. Rbb Fund | ProShares vs. Virtus ETF Trust | ProShares vs. Amplify CWP Enhanced |
| ProShares MSCI vs. ProShares MSCI EAFE | ProShares MSCI vs. ProShares MSCI Emerging | ProShares MSCI vs. ProShares SP MidCap | ProShares MSCI vs. ProShares Russell 2000 |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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