Correlation Between Promotora and ProShares Trust
Can any of the company-specific risk be diversified away by investing in both Promotora and ProShares Trust 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 Promotora and ProShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Promotora y Operadora and ProShares Trust , you can compare the effects of market volatilities on Promotora and ProShares Trust 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 Promotora with a short position of ProShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Promotora and ProShares Trust.
Diversification Opportunities for Promotora and ProShares Trust
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Promotora and ProShares is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Promotora y Operadora and ProShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Trust and Promotora 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 Promotora y Operadora are associated (or correlated) with ProShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Trust has no effect on the direction of Promotora i.e., Promotora and ProShares Trust go up and down completely randomly.
Pair Corralation between Promotora and ProShares Trust
Assuming the 90 days trading horizon Promotora is expected to generate 5.6 times less return on investment than ProShares Trust. But when comparing it to its historical volatility, Promotora y Operadora is 1.45 times less risky than ProShares Trust. It trades about 0.03 of its potential returns per unit of risk. ProShares Trust is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 74,215 in ProShares Trust on August 31, 2024 and sell it today you would earn a total of 123,559 from holding ProShares Trust or generate 166.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Promotora y Operadora vs. ProShares Trust
Performance |
| Timeline |
| Promotora y Operadora |
| ProShares Trust |
Promotora and ProShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Promotora and ProShares Trust
The main advantage of trading using opposite Promotora and ProShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Promotora position performs unexpectedly, ProShares Trust 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 Trust will offset losses from the drop in ProShares Trust's long position.| Promotora vs. Gruma SAB de | Promotora vs. Grupo Aeroportuario del | Promotora vs. Kimberly Clark de Mxico |
| ProShares Trust vs. Promotora y Operadora | ProShares Trust vs. UnitedHealth Group Incorporated | ProShares Trust vs. Qulitas Controladora SAB | ProShares Trust vs. Hoteles City Express |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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