Correlation Between FolioBeyond Rising and ProShares Inflation
Can any of the company-specific risk be diversified away by investing in both FolioBeyond Rising and ProShares Inflation 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 FolioBeyond Rising and ProShares Inflation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FolioBeyond Rising Rates and ProShares Inflation Expectations, you can compare the effects of market volatilities on FolioBeyond Rising and ProShares Inflation 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 FolioBeyond Rising with a short position of ProShares Inflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of FolioBeyond Rising and ProShares Inflation.
Diversification Opportunities for FolioBeyond Rising and ProShares Inflation
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between FolioBeyond and ProShares is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding FolioBeyond Rising Rates and ProShares Inflation Expectatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Inflation and FolioBeyond Rising 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 FolioBeyond Rising Rates are associated (or correlated) with ProShares Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Inflation has no effect on the direction of FolioBeyond Rising i.e., FolioBeyond Rising and ProShares Inflation go up and down completely randomly.
Pair Corralation between FolioBeyond Rising and ProShares Inflation
Given the investment horizon of 90 days FolioBeyond Rising Rates is expected to generate 0.57 times more return on investment than ProShares Inflation. However, FolioBeyond Rising Rates is 1.76 times less risky than ProShares Inflation. It trades about 0.02 of its potential returns per unit of risk. ProShares Inflation Expectations is currently generating about -0.04 per unit of risk. If you would invest 3,533 in FolioBeyond Rising Rates on August 30, 2024 and sell it today you would earn a total of 5.00 from holding FolioBeyond Rising Rates or generate 0.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
FolioBeyond Rising Rates vs. ProShares Inflation Expectatio
Performance |
| Timeline |
| FolioBeyond Rising Rates |
| ProShares Inflation |
FolioBeyond Rising and ProShares Inflation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FolioBeyond Rising and ProShares Inflation
The main advantage of trading using opposite FolioBeyond Rising and ProShares Inflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FolioBeyond Rising position performs unexpectedly, ProShares Inflation 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 Inflation will offset losses from the drop in ProShares Inflation's long position.| FolioBeyond Rising vs. WisdomTree Interest Rate | FolioBeyond Rising vs. WisdomTree SmallCap Quality | FolioBeyond Rising vs. WisdomTree Emerging Markets | FolioBeyond Rising vs. WisdomTree Emerging Markets |
| ProShares Inflation vs. SPDR SSgA Multi Asset | ProShares Inflation vs. ProShares Hedge Replication | ProShares Inflation vs. ProShares Short 7 10 | ProShares Inflation vs. ProShares Merger ETF |
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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