Correlation Between ProShares and ProShares MSCI
Can any of the company-specific risk be diversified away by investing in both ProShares and ProShares MSCI 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 ProShares MSCI 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 ProShares MSCI EAFE, you can compare the effects of market volatilities on ProShares and ProShares MSCI 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 ProShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares and ProShares MSCI.
Diversification Opportunities for ProShares and ProShares MSCI
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ProShares and ProShares is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding ProShares SP MidCap and ProShares MSCI EAFE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares MSCI EAFE 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 ProShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares MSCI EAFE has no effect on the direction of ProShares i.e., ProShares and ProShares MSCI go up and down completely randomly.
Pair Corralation between ProShares and ProShares MSCI
Given the investment horizon of 90 days ProShares SP MidCap is expected to generate 1.29 times more return on investment than ProShares MSCI. However, ProShares is 1.29 times more volatile than ProShares MSCI EAFE. It trades about 0.19 of its potential returns per unit of risk. ProShares MSCI EAFE is currently generating about -0.14 per unit of risk. If you would invest 7,962 in ProShares SP MidCap on August 28, 2024 and sell it today you would earn a total of 917.00 from holding ProShares SP MidCap or generate 11.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares SP MidCap vs. ProShares MSCI EAFE
Performance |
| Timeline |
| ProShares SP MidCap |
| ProShares MSCI EAFE |
ProShares and ProShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares and ProShares MSCI
The main advantage of trading using opposite ProShares and ProShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares position performs unexpectedly, ProShares MSCI 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 ProShares MSCI will offset losses from the drop in ProShares MSCI's long position.| ProShares vs. Vanguard Mid Cap Index | ProShares vs. iShares Core SP | ProShares vs. SPDR SP MIDCAP | ProShares vs. First Trust Dorsey |
| ProShares MSCI vs. Dimensional Core Equity | ProShares MSCI vs. Dimensional Emerging Core | ProShares MSCI vs. Dimensional Targeted Value | ProShares MSCI vs. Dimensional Small Cap |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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