Correlation Between ProShares Ultra and Capitol Series
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and Capitol Series 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 Capitol Series 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 Capitol Series Trust, you can compare the effects of market volatilities on ProShares Ultra and Capitol Series 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 Capitol Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and Capitol Series.
Diversification Opportunities for ProShares Ultra and Capitol Series
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ProShares and Capitol is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Technology and Capitol Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capitol Series Trust 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 Capitol Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capitol Series Trust has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Capitol Series go up and down completely randomly.
Pair Corralation between ProShares Ultra and Capitol Series
Considering the 90-day investment horizon ProShares Ultra Technology is expected to under-perform the Capitol Series. In addition to that, ProShares Ultra is 4.31 times more volatile than Capitol Series Trust. It trades about -0.05 of its total potential returns per unit of risk. Capitol Series Trust is currently generating about -0.11 per unit of volatility. If you would invest 3,926 in Capitol Series Trust on November 29, 2024 and sell it today you would lose (48.00) from holding Capitol Series Trust or give up 1.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra Technology vs. Capitol Series Trust
Performance |
| Timeline |
| ProShares Ultra Tech |
| Capitol Series Trust |
ProShares Ultra and Capitol Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and Capitol Series
The main advantage of trading using opposite ProShares Ultra and Capitol Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, Capitol Series 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 Capitol Series will offset losses from the drop in Capitol Series' 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 |
| Capitol Series vs. First Trust LongShort | Capitol Series vs. Cambria Global Momentum | Capitol Series vs. Cambria Global Asset | Capitol Series vs. ProShares Hedge Replication |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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