Correlation Between ProShares Trust and Ameriprise Financial
Can any of the company-specific risk be diversified away by investing in both ProShares Trust and Ameriprise Financial 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 Trust and Ameriprise Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Trust and Ameriprise Financial, you can compare the effects of market volatilities on ProShares Trust and Ameriprise Financial 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 Trust with a short position of Ameriprise Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Trust and Ameriprise Financial.
Diversification Opportunities for ProShares Trust and Ameriprise Financial
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between ProShares and Ameriprise is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Trust and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial and ProShares Trust 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 Trust are associated (or correlated) with Ameriprise Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ameriprise Financial has no effect on the direction of ProShares Trust i.e., ProShares Trust and Ameriprise Financial go up and down completely randomly.
Pair Corralation between ProShares Trust and Ameriprise Financial
Assuming the 90 days trading horizon ProShares Trust is expected to under-perform the Ameriprise Financial. But the etf apears to be less risky and, when comparing its historical volatility, ProShares Trust is 2.88 times less risky than Ameriprise Financial. The etf trades about -0.05 of its potential returns per unit of risk. The Ameriprise Financial is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 928,741 in Ameriprise Financial on September 2, 2024 and sell it today you would earn a total of 229,412 from holding Ameriprise Financial or generate 24.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Trust vs. Ameriprise Financial
Performance |
| Timeline |
| ProShares Trust |
| Ameriprise Financial |
ProShares Trust and Ameriprise Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Trust and Ameriprise Financial
The main advantage of trading using opposite ProShares Trust and Ameriprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Trust position performs unexpectedly, Ameriprise Financial 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 Ameriprise Financial will offset losses from the drop in Ameriprise Financial's long position.| ProShares Trust vs. ProShares Trust | ProShares Trust vs. ProShares Trust | ProShares Trust vs. ProShares Trust | ProShares Trust vs. ProShares Trust |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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