Correlation Between ProShares Online and Global X
Can any of the company-specific risk be diversified away by investing in both ProShares Online and Global X 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 Global X 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 Global X Infrastructure, you can compare the effects of market volatilities on ProShares Online and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Online and Global X.
Diversification Opportunities for ProShares Online and Global X
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ProShares and Global is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Online Retail and Global X Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Infrastructure 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Infrastructure has no effect on the direction of ProShares Online i.e., ProShares Online and Global X go up and down completely randomly.
Pair Corralation between ProShares Online and Global X
Given the investment horizon of 90 days ProShares Online is expected to generate 2.91 times less return on investment than Global X. But when comparing it to its historical volatility, ProShares Online Retail is 1.64 times less risky than Global X. It trades about 0.15 of its potential returns per unit of risk. Global X Infrastructure is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 4,121 in Global X Infrastructure on August 26, 2024 and sell it today you would earn a total of 417.00 from holding Global X Infrastructure or generate 10.12% 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. Global X Infrastructure
Performance |
| Timeline |
| ProShares Online Retail |
| Global X Infrastructure |
ProShares Online and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Online and Global X
The main advantage of trading using opposite ProShares Online and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Online position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X'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 |
| Global X vs. iShares Infrastructure ETF | Global X vs. Global X Cloud | Global X vs. Global X Cybersecurity | Global X vs. Invesco Dynamic Leisure |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |