Correlation Between AXS 125X and ProShares UltraShort
Can any of the company-specific risk be diversified away by investing in both AXS 125X and ProShares UltraShort 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 AXS 125X and ProShares UltraShort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AXS 125X NVDA and ProShares UltraShort MSCI, you can compare the effects of market volatilities on AXS 125X and ProShares UltraShort 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 AXS 125X with a short position of ProShares UltraShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXS 125X and ProShares UltraShort.
Diversification Opportunities for AXS 125X and ProShares UltraShort
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AXS and ProShares is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding AXS 125X NVDA and ProShares UltraShort MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort MSCI and AXS 125X 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 AXS 125X NVDA are associated (or correlated) with ProShares UltraShort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares UltraShort MSCI has no effect on the direction of AXS 125X i.e., AXS 125X and ProShares UltraShort go up and down completely randomly.
Pair Corralation between AXS 125X and ProShares UltraShort
Given the investment horizon of 90 days AXS 125X NVDA is expected to generate 1.95 times more return on investment than ProShares UltraShort. However, AXS 125X is 1.95 times more volatile than ProShares UltraShort MSCI. It trades about -0.04 of its potential returns per unit of risk. ProShares UltraShort MSCI is currently generating about -0.18 per unit of risk. If you would invest 2,909 in AXS 125X NVDA on September 4, 2024 and sell it today you would lose (115.00) from holding AXS 125X NVDA or give up 3.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AXS 125X NVDA vs. ProShares UltraShort MSCI
Performance |
| Timeline |
| AXS 125X NVDA |
| ProShares UltraShort MSCI |
AXS 125X and ProShares UltraShort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AXS 125X and ProShares UltraShort
The main advantage of trading using opposite AXS 125X and ProShares UltraShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXS 125X position performs unexpectedly, ProShares UltraShort 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 UltraShort will offset losses from the drop in ProShares UltraShort's long position.| AXS 125X vs. AXS TSLA Bear | AXS 125X vs. Direxion Shares ETF | AXS 125X vs. Direxion Shares ETF | AXS 125X vs. Direxion Shares ETF |
| ProShares UltraShort vs. ProShares UltraShort MSCI | ProShares UltraShort vs. ProShares Short MSCI | ProShares UltraShort vs. ProShares UltraShort MSCI | ProShares UltraShort vs. ProShares UltraShort Health |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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