Correlation Between DBX ETF and ProShares
Can any of the company-specific risk be diversified away by investing in both DBX ETF and ProShares 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 DBX ETF and ProShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DBX ETF Trust and ProShares SP 500, you can compare the effects of market volatilities on DBX ETF and ProShares 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 DBX ETF with a short position of ProShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of DBX ETF and ProShares.
Diversification Opportunities for DBX ETF and ProShares
Almost no diversification
The 3 months correlation between DBX and ProShares is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding DBX ETF Trust and ProShares SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares SP 500 and DBX ETF 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 DBX ETF Trust are associated (or correlated) with ProShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares SP 500 has no effect on the direction of DBX ETF i.e., DBX ETF and ProShares go up and down completely randomly.
Pair Corralation between DBX ETF and ProShares
Given the investment horizon of 90 days DBX ETF is expected to generate 1.23 times less return on investment than ProShares. But when comparing it to its historical volatility, DBX ETF Trust is 1.19 times less risky than ProShares. It trades about 0.13 of its potential returns per unit of risk. ProShares SP 500 is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 4,423 in ProShares SP 500 on September 1, 2024 and sell it today you would earn a total of 2,095 from holding ProShares SP 500 or generate 47.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.73% |
| Values | Daily Returns |
DBX ETF Trust vs. ProShares SP 500
Performance |
| Timeline |
| DBX ETF Trust |
| ProShares SP 500 |
DBX ETF and ProShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DBX ETF and ProShares
The main advantage of trading using opposite DBX ETF and ProShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DBX ETF position performs unexpectedly, ProShares 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 will offset losses from the drop in ProShares' long position.| DBX ETF vs. SPDR MSCI USA | DBX ETF vs. American Century STOXX | DBX ETF vs. Hartford Multifactor Equity | DBX ETF vs. PIMCO RAFI Dynamic |
| ProShares vs. Vanguard Total Stock | ProShares vs. SPDR SP 500 | ProShares vs. iShares Core SP | ProShares vs. Vanguard Dividend Appreciation |
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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