Correlation Between ProShares Ultra and IShares Broker
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and IShares Broker 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 IShares Broker 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 iShares Broker Dealers Securities, you can compare the effects of market volatilities on ProShares Ultra and IShares Broker 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 IShares Broker. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and IShares Broker.
Diversification Opportunities for ProShares Ultra and IShares Broker
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ProShares and IShares is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra QQQ and iShares Broker Dealers Securit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Broker Dealers 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 IShares Broker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Broker Dealers has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and IShares Broker go up and down completely randomly.
Pair Corralation between ProShares Ultra and IShares Broker
Considering the 90-day investment horizon ProShares Ultra is expected to generate 1.49 times less return on investment than IShares Broker. In addition to that, ProShares Ultra is 1.11 times more volatile than iShares Broker Dealers Securities. It trades about 0.24 of its total potential returns per unit of risk. iShares Broker Dealers Securities is currently generating about 0.39 per unit of volatility. If you would invest 13,262 in iShares Broker Dealers Securities on September 1, 2024 and sell it today you would earn a total of 2,079 from holding iShares Broker Dealers Securities or generate 15.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra QQQ vs. iShares Broker Dealers Securit
Performance |
| Timeline |
| ProShares Ultra QQQ |
| iShares Broker Dealers |
ProShares Ultra and IShares Broker Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and IShares Broker
The main advantage of trading using opposite ProShares Ultra and IShares Broker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, IShares Broker 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 IShares Broker will offset losses from the drop in IShares Broker'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 |
| IShares Broker vs. Vanguard Financials Index | IShares Broker vs. SPDR SP Bank | IShares Broker vs. Fidelity MSCI Financials | IShares Broker vs. iShares Financial Services |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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