Correlation Between ProShares and Vanguard High
Can any of the company-specific risk be diversified away by investing in both ProShares and Vanguard High 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 Vanguard High 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 Vanguard High Dividend, you can compare the effects of market volatilities on ProShares and Vanguard High 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 Vanguard High. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares and Vanguard High.
Diversification Opportunities for ProShares and Vanguard High
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ProShares and Vanguard is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding ProShares SP 500 and Vanguard High Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard High Dividend 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 Vanguard High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard High Dividend has no effect on the direction of ProShares i.e., ProShares and Vanguard High go up and down completely randomly.
Pair Corralation between ProShares and Vanguard High
Given the investment horizon of 90 days ProShares is expected to generate 1.28 times less return on investment than Vanguard High. But when comparing it to its historical volatility, ProShares SP 500 is 1.32 times less risky than Vanguard High. It trades about 0.25 of its potential returns per unit of risk. Vanguard High Dividend is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 12,857 in Vanguard High Dividend on August 30, 2024 and sell it today you would earn a total of 571.00 from holding Vanguard High Dividend or generate 4.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares SP 500 vs. Vanguard High Dividend
Performance |
| Timeline |
| ProShares SP 500 |
| Vanguard High Dividend |
ProShares and Vanguard High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares and Vanguard High
The main advantage of trading using opposite ProShares and Vanguard High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares position performs unexpectedly, Vanguard High 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 Vanguard High will offset losses from the drop in Vanguard High's long position.| ProShares vs. iShares Core Dividend | ProShares vs. SPDR SP Dividend | ProShares vs. Invesco SP 500 | ProShares vs. Vanguard Dividend Appreciation |
| Vanguard High vs. Vanguard Dividend Appreciation | Vanguard High vs. Schwab Dividend Equity | Vanguard High vs. Vanguard Real Estate | Vanguard High vs. Vanguard Total Stock |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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