Correlation Between NEOS ETF and Proshares Russell
Can any of the company-specific risk be diversified away by investing in both NEOS ETF and Proshares Russell 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 Russell 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 Russell 2000, you can compare the effects of market volatilities on NEOS ETF and Proshares Russell 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 Russell. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEOS ETF and Proshares Russell.
Diversification Opportunities for NEOS ETF and Proshares Russell
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NEOS and Proshares is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding NEOS ETF Trust and Proshares Russell 2000 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Proshares Russell 2000 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 Russell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Proshares Russell 2000 has no effect on the direction of NEOS ETF i.e., NEOS ETF and Proshares Russell go up and down completely randomly.
Pair Corralation between NEOS ETF and Proshares Russell
Given the investment horizon of 90 days NEOS ETF is expected to generate 6.53 times less return on investment than Proshares Russell. But when comparing it to its historical volatility, NEOS ETF Trust is 16.39 times less risky than Proshares Russell. It trades about 0.09 of its potential returns per unit of risk. Proshares Russell 2000 is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 4,343 in Proshares Russell 2000 on September 12, 2024 and sell it today you would lose (58.00) from holding Proshares Russell 2000 or give up 1.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEOS ETF Trust vs. Proshares Russell 2000
Performance |
| Timeline |
| NEOS ETF Trust |
| Proshares Russell 2000 |
NEOS ETF and Proshares Russell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEOS ETF and Proshares Russell
The main advantage of trading using opposite NEOS ETF and Proshares Russell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEOS ETF position performs unexpectedly, Proshares Russell 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 Russell will offset losses from the drop in Proshares Russell's long position.| NEOS ETF vs. JPMorgan Equity Premium | NEOS ETF vs. Global X SP | NEOS ETF vs. Amplify CWP Enhanced | NEOS ETF vs. Global X Russell |
| Proshares Russell vs. Freedom Day Dividend | Proshares Russell vs. Franklin Templeton ETF | Proshares Russell vs. iShares MSCI China | Proshares Russell vs. Tidal Trust II |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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