Correlation Between NYSE Composite and ProShares Short
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and ProShares Short 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 NYSE Composite and ProShares Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and ProShares Short MidCap400, you can compare the effects of market volatilities on NYSE Composite and ProShares Short 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 NYSE Composite with a short position of ProShares Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and ProShares Short.
Diversification Opportunities for NYSE Composite and ProShares Short
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NYSE and ProShares is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and ProShares Short MidCap400 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Short MidCap400 and NYSE Composite 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 NYSE Composite are associated (or correlated) with ProShares Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Short MidCap400 has no effect on the direction of NYSE Composite i.e., NYSE Composite and ProShares Short go up and down completely randomly.
Pair Corralation between NYSE Composite and ProShares Short
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.67 times more return on investment than ProShares Short. However, NYSE Composite is 1.49 times less risky than ProShares Short. It trades about 0.11 of its potential returns per unit of risk. ProShares Short MidCap400 is currently generating about -0.05 per unit of risk. If you would invest 1,554,847 in NYSE Composite on September 2, 2024 and sell it today you would earn a total of 472,357 from holding NYSE Composite or generate 30.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. ProShares Short MidCap400
Performance |
| Timeline |
NYSE Composite and ProShares Short Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
ProShares Short MidCap400
Pair trading matchups for ProShares Short
Pair Trading with NYSE Composite and ProShares Short
The main advantage of trading using opposite NYSE Composite and ProShares Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, ProShares Short 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 Short will offset losses from the drop in ProShares Short's long position.| NYSE Composite vs. Simon Property Group | NYSE Composite vs. Merit Medical Systems | NYSE Composite vs. Catalent | NYSE Composite vs. Titan Machinery |
| ProShares Short vs. ProShares Short SmallCap600 | ProShares Short vs. ProShares UltraShort MidCap400 | ProShares Short vs. ProShares UltraShort SmallCap600 | ProShares Short vs. ProShares Short MSCI |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |