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 Russell2000, 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
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NYSE and ProShares is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and ProShares Short Russell2000 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Short Russ 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 Russ 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 0.68 times more return on investment than ProShares Short. However, NYSE Composite is 1.47 times less risky than ProShares Short. It trades about 0.24 of its potential returns per unit of risk. ProShares Short Russell2000 is currently generating about -0.04 per unit of risk. If you would invest 1,936,450 in NYSE Composite on October 26, 2024 and sell it today you would earn a total of 61,428 from holding NYSE Composite or generate 3.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
NYSE Composite vs. ProShares Short Russell2000
Performance |
| Timeline |
NYSE Composite and ProShares Short Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
ProShares Short Russell2000
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. Lindblad Expeditions Holdings | NYSE Composite vs. Proficient Auto Logistics, | NYSE Composite vs. Hafnia Limited | NYSE Composite vs. Arm Holdings plc |
| ProShares Short vs. ProShares Short QQQ | ProShares Short vs. ProShares Short Dow30 | ProShares Short vs. ProShares Short MidCap400 | ProShares Short vs. ProShares UltraShort Russell2000 |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |