Correlation Between ProShares and Barrons 400
Can any of the company-specific risk be diversified away by investing in both ProShares and Barrons 400 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 and Barrons 400 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares SP MidCap and Barrons 400 ETF, you can compare the effects of market volatilities on ProShares and Barrons 400 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 with a short position of Barrons 400. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares and Barrons 400.
Diversification Opportunities for ProShares and Barrons 400
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ProShares and Barrons is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding ProShares SP MidCap and Barrons 400 ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barrons 400 ETF and ProShares 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 SP MidCap are associated (or correlated) with Barrons 400. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barrons 400 ETF has no effect on the direction of ProShares i.e., ProShares and Barrons 400 go up and down completely randomly.
Pair Corralation between ProShares and Barrons 400
Given the investment horizon of 90 days ProShares SP MidCap is expected to generate 0.72 times more return on investment than Barrons 400. However, ProShares SP MidCap is 1.39 times less risky than Barrons 400. It trades about -0.07 of its potential returns per unit of risk. Barrons 400 ETF is currently generating about -0.07 per unit of risk. If you would invest 8,047 in ProShares SP MidCap on January 15, 2025 and sell it today you would lose (294.00) from holding ProShares SP MidCap or give up 3.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares SP MidCap vs. Barrons 400 ETF
Performance |
| Timeline |
| ProShares SP MidCap |
| Barrons 400 ETF |
ProShares and Barrons 400 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares and Barrons 400
The main advantage of trading using opposite ProShares and Barrons 400 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares position performs unexpectedly, Barrons 400 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 Barrons 400 will offset losses from the drop in Barrons 400's long position.| ProShares vs. ProShares Russell 2000 | ProShares vs. ProShares MSCI EAFE | ProShares vs. ProShares MSCI Emerging | ProShares vs. ProShares MSCI Europe |
| Barrons 400 vs. FlexShares Quality Dividend | Barrons 400 vs. Invesco SP Spin Off | Barrons 400 vs. SPDR MSCI USA | Barrons 400 vs. ALPS International Sector |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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