Correlation Between ProShares and AXIS Capital
Can any of the company-specific risk be diversified away by investing in both ProShares and AXIS Capital 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 ProShares and AXIS Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares On Demand ETF and AXIS Capital Holdings, you can compare the effects of market volatilities on ProShares and AXIS Capital 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 ProShares with a short position of AXIS Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares and AXIS Capital.
Diversification Opportunities for ProShares and AXIS Capital
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ProShares and AXIS is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding ProShares On Demand ETF and AXIS Capital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXIS Capital Holdings and ProShares 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 ProShares On Demand ETF are associated (or correlated) with AXIS Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXIS Capital Holdings has no effect on the direction of ProShares i.e., ProShares and AXIS Capital go up and down completely randomly.
Pair Corralation between ProShares and AXIS Capital
Considering the 90-day investment horizon ProShares is expected to generate 2.93 times less return on investment than AXIS Capital. But when comparing it to its historical volatility, ProShares On Demand ETF is 1.38 times less risky than AXIS Capital. It trades about 0.26 of its potential returns per unit of risk. AXIS Capital Holdings is currently generating about 0.55 of returns per unit of risk over similar time horizon. If you would invest 7,938 in AXIS Capital Holdings on September 4, 2024 and sell it today you would earn a total of 1,452 from holding AXIS Capital Holdings or generate 18.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares On Demand ETF vs. AXIS Capital Holdings
Performance |
| Timeline |
| ProShares On Demand |
| AXIS Capital Holdings |
ProShares and AXIS Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares and AXIS Capital
The main advantage of trading using opposite ProShares and AXIS Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares position performs unexpectedly, AXIS Capital 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 AXIS Capital will offset losses from the drop in AXIS Capital's long position.| ProShares vs. ProShares Smart Materials | ProShares vs. ProShares SP Kensho | ProShares vs. ProShares Big Data | ProShares vs. ProShares SP Kensho |
| AXIS Capital vs. Assured Guaranty | AXIS Capital vs. Enact Holdings | AXIS Capital vs. NMI Holdings | AXIS Capital vs. Radian Group |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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