Correlation Between ProShares and Exchange Listed
Can any of the company-specific risk be diversified away by investing in both ProShares and Exchange Listed 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 Exchange Listed 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 Exchange Listed Funds, you can compare the effects of market volatilities on ProShares and Exchange Listed 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 Exchange Listed. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares and Exchange Listed.
Diversification Opportunities for ProShares and Exchange Listed
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ProShares and Exchange is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding ProShares SP MidCap and Exchange Listed Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exchange Listed Funds 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 Exchange Listed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exchange Listed Funds has no effect on the direction of ProShares i.e., ProShares and Exchange Listed go up and down completely randomly.
Pair Corralation between ProShares and Exchange Listed
Given the investment horizon of 90 days ProShares SP MidCap is expected to under-perform the Exchange Listed. But the etf apears to be less risky and, when comparing its historical volatility, ProShares SP MidCap is 1.15 times less risky than Exchange Listed. The etf trades about -0.09 of its potential returns per unit of risk. The Exchange Listed Funds is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 4,369 in Exchange Listed Funds on November 28, 2024 and sell it today you would lose (4.00) from holding Exchange Listed Funds or give up 0.09% 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. Exchange Listed Funds
Performance |
| Timeline |
| ProShares SP MidCap |
| Exchange Listed Funds |
ProShares and Exchange Listed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares and Exchange Listed
The main advantage of trading using opposite ProShares and Exchange Listed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares position performs unexpectedly, Exchange Listed 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 Exchange Listed will offset losses from the drop in Exchange Listed's long position.| ProShares vs. ProShares Russell 2000 | ProShares vs. ProShares MSCI EAFE | ProShares vs. ProShares MSCI Emerging | ProShares vs. ProShares MSCI Europe |
| Exchange Listed vs. ETC 6 Meridian | Exchange Listed vs. 6 Meridian Mega | Exchange Listed vs. Tidal ETF Trust | Exchange Listed vs. 6 Meridian Low |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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