Correlation Between ProShares Short and AXS TSLA
Can any of the company-specific risk be diversified away by investing in both ProShares Short and AXS TSLA 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 Short and AXS TSLA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Short QQQ and AXS TSLA Bear, you can compare the effects of market volatilities on ProShares Short and AXS TSLA 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 Short with a short position of AXS TSLA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Short and AXS TSLA.
Diversification Opportunities for ProShares Short and AXS TSLA
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ProShares and AXS is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Short QQQ and AXS TSLA Bear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXS TSLA Bear and ProShares Short 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 Short QQQ are associated (or correlated) with AXS TSLA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXS TSLA Bear has no effect on the direction of ProShares Short i.e., ProShares Short and AXS TSLA go up and down completely randomly.
Pair Corralation between ProShares Short and AXS TSLA
Considering the 90-day investment horizon ProShares Short QQQ is expected to generate 0.12 times more return on investment than AXS TSLA. However, ProShares Short QQQ is 8.5 times less risky than AXS TSLA. It trades about -0.06 of its potential returns per unit of risk. AXS TSLA Bear is currently generating about -0.27 per unit of risk. If you would invest 3,905 in ProShares Short QQQ on August 26, 2024 and sell it today you would lose (68.00) from holding ProShares Short QQQ or give up 1.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Short QQQ vs. AXS TSLA Bear
Performance |
| Timeline |
| ProShares Short QQQ |
| AXS TSLA Bear |
ProShares Short and AXS TSLA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Short and AXS TSLA
The main advantage of trading using opposite ProShares Short and AXS TSLA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Short position performs unexpectedly, AXS TSLA 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 AXS TSLA will offset losses from the drop in AXS TSLA's long position.| ProShares Short vs. ProShares Short SP500 | ProShares Short vs. ProShares Short Dow30 | ProShares Short vs. ProShares Short Russell2000 | ProShares Short vs. ProShares UltraShort QQQ |
| AXS TSLA vs. AXS 125X NVDA | AXS TSLA vs. Direxion Shares ETF | AXS TSLA vs. Direxion Shares ETF | AXS TSLA vs. Tuttle Capital Short |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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