Correlation Between ProShares and Siren DIVCON
Can any of the company-specific risk be diversified away by investing in both ProShares and Siren DIVCON 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 Siren DIVCON 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 Siren DIVCON Leaders, you can compare the effects of market volatilities on ProShares and Siren DIVCON 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 Siren DIVCON. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares and Siren DIVCON.
Diversification Opportunities for ProShares and Siren DIVCON
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ProShares and Siren is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding ProShares SP MidCap and Siren DIVCON Leaders in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siren DIVCON Leaders 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 Siren DIVCON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siren DIVCON Leaders has no effect on the direction of ProShares i.e., ProShares and Siren DIVCON go up and down completely randomly.
Pair Corralation between ProShares and Siren DIVCON
Given the investment horizon of 90 days ProShares SP MidCap is expected to generate 1.32 times more return on investment than Siren DIVCON. However, ProShares is 1.32 times more volatile than Siren DIVCON Leaders. It trades about 0.33 of its potential returns per unit of risk. Siren DIVCON Leaders is currently generating about 0.12 per unit of risk. If you would invest 8,176 in ProShares SP MidCap on August 28, 2024 and sell it today you would earn a total of 703.00 from holding ProShares SP MidCap or generate 8.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares SP MidCap vs. Siren DIVCON Leaders
Performance |
| Timeline |
| ProShares SP MidCap |
| Siren DIVCON Leaders |
ProShares and Siren DIVCON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares and Siren DIVCON
The main advantage of trading using opposite ProShares and Siren DIVCON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares position performs unexpectedly, Siren DIVCON 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 Siren DIVCON will offset losses from the drop in Siren DIVCON's long position.| ProShares vs. ProShares Russell 2000 | ProShares vs. ProShares MSCI EAFE | ProShares vs. ProShares MSCI Emerging | ProShares vs. ProShares MSCI Europe |
| Siren DIVCON vs. Morningstar Unconstrained Allocation | Siren DIVCON vs. High Yield Municipal Fund | Siren DIVCON vs. Via Renewables | Siren DIVCON vs. Knife River |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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