Correlation Between ProShares Ultra and Invesco QQQ
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and Invesco QQQ 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 Invesco QQQ 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 Invesco QQQ Trust, you can compare the effects of market volatilities on ProShares Ultra and Invesco QQQ 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 Invesco QQQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and Invesco QQQ.
Diversification Opportunities for ProShares Ultra and Invesco QQQ
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between ProShares and Invesco is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra QQQ and Invesco QQQ Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco QQQ 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 Invesco QQQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco QQQ Trust has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Invesco QQQ go up and down completely randomly.
Pair Corralation between ProShares Ultra and Invesco QQQ
Considering the 90-day investment horizon ProShares Ultra QQQ is expected to generate 2.0 times more return on investment than Invesco QQQ. However, ProShares Ultra is 2.0 times more volatile than Invesco QQQ Trust. It trades about 0.11 of its potential returns per unit of risk. Invesco QQQ Trust is currently generating about 0.12 per unit of risk. If you would invest 10,973 in ProShares Ultra QQQ on November 9, 2024 and sell it today you would earn a total of 533.00 from holding ProShares Ultra QQQ or generate 4.86% 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. Invesco QQQ Trust
Performance |
| Timeline |
| ProShares Ultra QQQ |
| Invesco QQQ Trust |
ProShares Ultra and Invesco QQQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and Invesco QQQ
The main advantage of trading using opposite ProShares Ultra and Invesco QQQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, Invesco QQQ 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 Invesco QQQ will offset losses from the drop in Invesco QQQ'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 |
| Invesco QQQ vs. SPDR SP 500 | Invesco QQQ vs. Vanguard SP 500 | Invesco QQQ vs. iShares Russell 2000 | Invesco QQQ vs. SPDR Dow Jones |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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