Correlation Between NEOS ETF and ProShares Nasdaq
Can any of the company-specific risk be diversified away by investing in both NEOS ETF and ProShares Nasdaq 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 NEOS ETF and ProShares Nasdaq into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEOS ETF Trust and ProShares Nasdaq 100 High, you can compare the effects of market volatilities on NEOS ETF and ProShares Nasdaq 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 NEOS ETF with a short position of ProShares Nasdaq. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEOS ETF and ProShares Nasdaq.
Diversification Opportunities for NEOS ETF and ProShares Nasdaq
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NEOS and ProShares is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding NEOS ETF Trust and ProShares Nasdaq 100 High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Nasdaq 100 and NEOS ETF 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 NEOS ETF Trust are associated (or correlated) with ProShares Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Nasdaq 100 has no effect on the direction of NEOS ETF i.e., NEOS ETF and ProShares Nasdaq go up and down completely randomly.
Pair Corralation between NEOS ETF and ProShares Nasdaq
Given the investment horizon of 90 days NEOS ETF Trust is expected to generate 0.77 times more return on investment than ProShares Nasdaq. However, NEOS ETF Trust is 1.3 times less risky than ProShares Nasdaq. It trades about 0.07 of its potential returns per unit of risk. ProShares Nasdaq 100 High is currently generating about 0.03 per unit of risk. If you would invest 2,557 in NEOS ETF Trust on August 30, 2024 and sell it today you would earn a total of 32.00 from holding NEOS ETF Trust or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEOS ETF Trust vs. ProShares Nasdaq 100 High
Performance |
| Timeline |
| NEOS ETF Trust |
| ProShares Nasdaq 100 |
NEOS ETF and ProShares Nasdaq Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEOS ETF and ProShares Nasdaq
The main advantage of trading using opposite NEOS ETF and ProShares Nasdaq positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEOS ETF position performs unexpectedly, ProShares Nasdaq 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 Nasdaq will offset losses from the drop in ProShares Nasdaq's long position.| NEOS ETF vs. Global X Russell | NEOS ETF vs. Global X SP | NEOS ETF vs. Global X NASDAQ | NEOS ETF vs. Amplify CWP Enhanced |
| ProShares Nasdaq vs. Global X SP | ProShares Nasdaq vs. Amplify CWP Enhanced | ProShares Nasdaq vs. Global X Russell | ProShares Nasdaq vs. JPMorgan Nasdaq Equity |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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