Correlation Between ProShares Ultra and IShares JP
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and IShares JP 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 Ultra and IShares JP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Ultra Technology and iShares JP Morgan, you can compare the effects of market volatilities on ProShares Ultra and IShares JP 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 Ultra with a short position of IShares JP. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and IShares JP.
Diversification Opportunities for ProShares Ultra and IShares JP
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between ProShares and IShares is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Technology and iShares JP Morgan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares JP Morgan and ProShares Ultra 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 Ultra Technology are associated (or correlated) with IShares JP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares JP Morgan has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and IShares JP go up and down completely randomly.
Pair Corralation between ProShares Ultra and IShares JP
Considering the 90-day investment horizon ProShares Ultra Technology is expected to generate 12.17 times more return on investment than IShares JP. However, ProShares Ultra is 12.17 times more volatile than iShares JP Morgan. It trades about 0.08 of its potential returns per unit of risk. iShares JP Morgan is currently generating about 0.31 per unit of risk. If you would invest 7,020 in ProShares Ultra Technology on November 18, 2024 and sell it today you would earn a total of 285.00 from holding ProShares Ultra Technology or generate 4.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra Technology vs. iShares JP Morgan
Performance |
| Timeline |
| ProShares Ultra Tech |
| iShares JP Morgan |
ProShares Ultra and IShares JP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and IShares JP
The main advantage of trading using opposite ProShares Ultra and IShares JP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, IShares JP 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 IShares JP will offset losses from the drop in IShares JP's long position.| ProShares Ultra vs. ProShares Ultra Health | ProShares Ultra vs. ProShares Ultra Semiconductors | ProShares Ultra vs. ProShares Ultra Industrials | ProShares Ultra vs. ProShares Ultra Consumer |
| IShares JP vs. VanEck Emerging Markets | IShares JP vs. iShares Intl High | IShares JP vs. iShares JP Morgan | IShares JP vs. iShares International High |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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