Correlation Between ProShares Online and Defiance ETFs
Can any of the company-specific risk be diversified away by investing in both ProShares Online and Defiance ETFs 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 Online and Defiance ETFs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Online Retail and Defiance ETFs, you can compare the effects of market volatilities on ProShares Online and Defiance ETFs 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 Online with a short position of Defiance ETFs. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Online and Defiance ETFs.
Diversification Opportunities for ProShares Online and Defiance ETFs
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ProShares and Defiance is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Online Retail and Defiance ETFs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Defiance ETFs and ProShares Online 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 Online Retail are associated (or correlated) with Defiance ETFs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Defiance ETFs has no effect on the direction of ProShares Online i.e., ProShares Online and Defiance ETFs go up and down completely randomly.
Pair Corralation between ProShares Online and Defiance ETFs
If you would invest 4,401 in ProShares Online Retail on August 30, 2024 and sell it today you would earn a total of 217.00 from holding ProShares Online Retail or generate 4.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
ProShares Online Retail vs. Defiance ETFs
Performance |
| Timeline |
| ProShares Online Retail |
| Defiance ETFs |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ProShares Online and Defiance ETFs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Online and Defiance ETFs
The main advantage of trading using opposite ProShares Online and Defiance ETFs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Online position performs unexpectedly, Defiance ETFs 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 Defiance ETFs will offset losses from the drop in Defiance ETFs' long position.| ProShares Online vs. Amplify Online Retail | ProShares Online vs. ProShares Long OnlineShort | ProShares Online vs. Global X E commerce | ProShares Online vs. WisdomTree Cloud Computing |
| Defiance ETFs vs. Global X Internet | Defiance ETFs vs. First Trust NASDAQ | Defiance ETFs vs. Global X Cloud | Defiance ETFs vs. Pacer Benchmark Data |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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