Correlation Between ProShares Ultra and GraniteShares ETF
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and GraniteShares ETF 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 Ultra and GraniteShares ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Ultra QQQ and GraniteShares ETF Trust, you can compare the effects of market volatilities on ProShares Ultra and GraniteShares ETF 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 Ultra with a short position of GraniteShares ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and GraniteShares ETF.
Diversification Opportunities for ProShares Ultra and GraniteShares ETF
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ProShares and GraniteShares is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra QQQ and GraniteShares ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares ETF Trust and ProShares Ultra 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 Ultra QQQ are associated (or correlated) with GraniteShares ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GraniteShares ETF Trust has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and GraniteShares ETF go up and down completely randomly.
Pair Corralation between ProShares Ultra and GraniteShares ETF
Considering the 90-day investment horizon ProShares Ultra is expected to generate 24.86 times less return on investment than GraniteShares ETF. But when comparing it to its historical volatility, ProShares Ultra QQQ is 8.04 times less risky than GraniteShares ETF. It trades about 0.06 of its potential returns per unit of risk. GraniteShares ETF Trust is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 3,310 in GraniteShares ETF Trust on August 23, 2024 and sell it today you would earn a total of 2,096 from holding GraniteShares ETF Trust or generate 63.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra QQQ vs. GraniteShares ETF Trust
Performance |
| Timeline |
| ProShares Ultra QQQ |
| GraniteShares ETF Trust |
ProShares Ultra and GraniteShares ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and GraniteShares ETF
The main advantage of trading using opposite ProShares Ultra and GraniteShares ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, GraniteShares ETF 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 GraniteShares ETF will offset losses from the drop in GraniteShares ETF's long position.| ProShares Ultra vs. ProShares Ultra SP500 | ProShares Ultra vs. ProShares UltraShort QQQ | ProShares Ultra vs. ProShares Ultra Dow30 | ProShares Ultra vs. ProShares Ultra Russell2000 |
| GraniteShares ETF vs. GraniteShares ETF Trust | GraniteShares ETF vs. Direxion Shares ETF | GraniteShares ETF vs. Direxion Daily AMZN | GraniteShares ETF vs. Direxion Daily GOOGL |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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