Correlation Between ProShares Ultra and Innovator Equity
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and Innovator Equity 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 Innovator Equity 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 Innovator Equity Premium, you can compare the effects of market volatilities on ProShares Ultra and Innovator Equity 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 Innovator Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and Innovator Equity.
Diversification Opportunities for ProShares Ultra and Innovator Equity
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ProShares and Innovator is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra QQQ and Innovator Equity Premium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovator Equity Premium 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 Innovator Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovator Equity Premium has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Innovator Equity go up and down completely randomly.
Pair Corralation between ProShares Ultra and Innovator Equity
Considering the 90-day investment horizon ProShares Ultra QQQ is expected to generate 16.25 times more return on investment than Innovator Equity. However, ProShares Ultra is 16.25 times more volatile than Innovator Equity Premium. It trades about 0.1 of its potential returns per unit of risk. Innovator Equity Premium is currently generating about 0.2 per unit of risk. If you would invest 3,920 in ProShares Ultra QQQ on August 30, 2024 and sell it today you would earn a total of 6,725 from holding ProShares Ultra QQQ or generate 171.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 46.46% |
| Values | Daily Returns |
ProShares Ultra QQQ vs. Innovator Equity Premium
Performance |
| Timeline |
| ProShares Ultra QQQ |
| Innovator Equity Premium |
ProShares Ultra and Innovator Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and Innovator Equity
The main advantage of trading using opposite ProShares Ultra and Innovator Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, Innovator Equity 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 Innovator Equity will offset losses from the drop in Innovator Equity'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 |
| Innovator Equity vs. ABIVAX Socit Anonyme | Innovator Equity vs. Pinnacle Sherman Multi Strategy | Innovator Equity vs. Morningstar Unconstrained Allocation | Innovator Equity vs. SPACE |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |