Correlation Between ProShares Online and US Global
Can any of the company-specific risk be diversified away by investing in both ProShares Online and US Global 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 US Global 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 US Global Jets, you can compare the effects of market volatilities on ProShares Online and US Global 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 US Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Online and US Global.
Diversification Opportunities for ProShares Online and US Global
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ProShares and JETS is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Online Retail and US Global Jets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Global Jets 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 US Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Global Jets has no effect on the direction of ProShares Online i.e., ProShares Online and US Global go up and down completely randomly.
Pair Corralation between ProShares Online and US Global
Given the investment horizon of 90 days ProShares Online is expected to generate 2.14 times less return on investment than US Global. But when comparing it to its historical volatility, ProShares Online Retail is 1.6 times less risky than US Global. It trades about 0.15 of its potential returns per unit of risk. US Global Jets is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 2,254 in US Global Jets on August 26, 2024 and sell it today you would earn a total of 164.00 from holding US Global Jets or generate 7.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Online Retail vs. US Global Jets
Performance |
| Timeline |
| ProShares Online Retail |
| US Global Jets |
ProShares Online and US Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Online and US Global
The main advantage of trading using opposite ProShares Online and US Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Online position performs unexpectedly, US Global 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 US Global will offset losses from the drop in US Global's 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 |
| US Global vs. Invesco Solar ETF | US Global vs. iShares Global Clean | US Global vs. iShares Semiconductor ETF | US Global vs. Amplify ETF Trust |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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