Correlation Between ProShares Ultra and Matthews International
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and Matthews International 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 Matthews International 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 Matthews International Funds, you can compare the effects of market volatilities on ProShares Ultra and Matthews International 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 Matthews International. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and Matthews International.
Diversification Opportunities for ProShares Ultra and Matthews International
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and Matthews is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra QQQ and Matthews International Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews International 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 Matthews International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews International has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Matthews International go up and down completely randomly.
Pair Corralation between ProShares Ultra and Matthews International
Considering the 90-day investment horizon ProShares Ultra QQQ is expected to generate 1.9 times more return on investment than Matthews International. However, ProShares Ultra is 1.9 times more volatile than Matthews International Funds. It trades about 0.12 of its potential returns per unit of risk. Matthews International Funds is currently generating about -0.02 per unit of risk. If you would invest 3,522 in ProShares Ultra QQQ on September 13, 2024 and sell it today you would earn a total of 7,996 from holding ProShares Ultra QQQ or generate 227.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 72.53% |
| Values | Daily Returns |
ProShares Ultra QQQ vs. Matthews International Funds
Performance |
| Timeline |
| ProShares Ultra QQQ |
| Matthews International |
ProShares Ultra and Matthews International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and Matthews International
The main advantage of trading using opposite ProShares Ultra and Matthews International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, Matthews International 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 Matthews International will offset losses from the drop in Matthews International'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 |
| Matthews International vs. Freedom Day Dividend | Matthews International vs. Franklin Templeton ETF | Matthews International vs. iShares MSCI China | Matthews International vs. Tidal Trust II |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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