Correlation Between ProShares Ultra and Pgim Large
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and Pgim Large 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 Pgim Large 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 Pgim Large Cap Buffer, you can compare the effects of market volatilities on ProShares Ultra and Pgim Large 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 Pgim Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and Pgim Large.
Diversification Opportunities for ProShares Ultra and Pgim Large
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ProShares and Pgim is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra QQQ and Pgim Large Cap Buffer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pgim Large Cap 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 Pgim Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pgim Large Cap has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Pgim Large go up and down completely randomly.
Pair Corralation between ProShares Ultra and Pgim Large
Considering the 90-day investment horizon ProShares Ultra QQQ is expected to generate 15.21 times more return on investment than Pgim Large. However, ProShares Ultra is 15.21 times more volatile than Pgim Large Cap Buffer. It trades about 0.08 of its potential returns per unit of risk. Pgim Large Cap Buffer is currently generating about 0.28 per unit of risk. If you would invest 10,310 in ProShares Ultra QQQ on August 26, 2024 and sell it today you would earn a total of 362.00 from holding ProShares Ultra QQQ or generate 3.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra QQQ vs. Pgim Large Cap Buffer
Performance |
| Timeline |
| ProShares Ultra QQQ |
| Pgim Large Cap |
ProShares Ultra and Pgim Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and Pgim Large
The main advantage of trading using opposite ProShares Ultra and Pgim Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, Pgim Large 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 Pgim Large will offset losses from the drop in Pgim Large'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 |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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