Correlation Between ProShares and Nationwide
Can any of the company-specific risk be diversified away by investing in both ProShares and Nationwide 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 Nationwide 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 Nationwide, you can compare the effects of market volatilities on ProShares and Nationwide 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 Nationwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares and Nationwide.
Diversification Opportunities for ProShares and Nationwide
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ProShares and Nationwide is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding ProShares SP MidCap and Nationwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide 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 Nationwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide has no effect on the direction of ProShares i.e., ProShares and Nationwide go up and down completely randomly.
Pair Corralation between ProShares and Nationwide
If you would invest 8,178 in ProShares SP MidCap on August 30, 2024 and sell it today you would earn a total of 642.00 from holding ProShares SP MidCap or generate 7.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 2.27% |
| Values | Daily Returns |
ProShares SP MidCap vs. Nationwide
Performance |
| Timeline |
| ProShares SP MidCap |
| Nationwide |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ProShares and Nationwide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares and Nationwide
The main advantage of trading using opposite ProShares and Nationwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares position performs unexpectedly, Nationwide 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 Nationwide will offset losses from the drop in Nationwide's long position.| ProShares vs. ProShares Russell 2000 | ProShares vs. ProShares MSCI EAFE | ProShares vs. ProShares MSCI Emerging | ProShares vs. ProShares MSCI Europe |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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