Correlation Between ProShares Pet and ProShares Online
Can any of the company-specific risk be diversified away by investing in both ProShares Pet and ProShares Online 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 Pet and ProShares Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Pet Care and ProShares Online Retail, you can compare the effects of market volatilities on ProShares Pet and ProShares Online 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 Pet with a short position of ProShares Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Pet and ProShares Online.
Diversification Opportunities for ProShares Pet and ProShares Online
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between ProShares and ProShares is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Pet Care and ProShares Online Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Online Retail and ProShares Pet 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 Pet Care are associated (or correlated) with ProShares Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Online Retail has no effect on the direction of ProShares Pet i.e., ProShares Pet and ProShares Online go up and down completely randomly.
Pair Corralation between ProShares Pet and ProShares Online
Given the investment horizon of 90 days ProShares Pet is expected to generate 2.63 times less return on investment than ProShares Online. But when comparing it to its historical volatility, ProShares Pet Care is 1.2 times less risky than ProShares Online. It trades about 0.08 of its potential returns per unit of risk. ProShares Online Retail is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 4,575 in ProShares Online Retail on October 24, 2024 and sell it today you would earn a total of 154.00 from holding ProShares Online Retail or generate 3.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
ProShares Pet Care vs. ProShares Online Retail
Performance |
| Timeline |
| ProShares Pet Care |
| ProShares Online Retail |
ProShares Pet and ProShares Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Pet and ProShares Online
The main advantage of trading using opposite ProShares Pet and ProShares Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Pet position performs unexpectedly, ProShares Online 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 Online will offset losses from the drop in ProShares Online's long position.| ProShares Pet vs. ProShares Online Retail | ProShares Pet vs. VanEck Video Gaming | ProShares Pet vs. Renaissance IPO ETF | ProShares Pet vs. Invesco Dynamic Leisure |
| 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 |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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