Correlation Between ProShares Short and ProShares Short
Can any of the company-specific risk be diversified away by investing in both ProShares Short and ProShares Short 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 Short and ProShares Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Short Russell2000 and ProShares Short SP500, you can compare the effects of market volatilities on ProShares Short and ProShares Short 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 Short with a short position of ProShares Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Short and ProShares Short.
Diversification Opportunities for ProShares Short and ProShares Short
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ProShares and ProShares is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Short Russell2000 and ProShares Short SP500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Short SP500 and ProShares Short 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 Short Russell2000 are associated (or correlated) with ProShares Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Short SP500 has no effect on the direction of ProShares Short i.e., ProShares Short and ProShares Short go up and down completely randomly.
Pair Corralation between ProShares Short and ProShares Short
Considering the 90-day investment horizon ProShares Short Russell2000 is expected to under-perform the ProShares Short. In addition to that, ProShares Short is 1.74 times more volatile than ProShares Short SP500. It trades about -0.07 of its total potential returns per unit of risk. ProShares Short SP500 is currently generating about -0.1 per unit of volatility. If you would invest 5,188 in ProShares Short SP500 on August 25, 2024 and sell it today you would lose (964.00) from holding ProShares Short SP500 or give up 18.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Short Russell2000 vs. ProShares Short SP500
Performance |
| Timeline |
| ProShares Short Russ |
| ProShares Short SP500 |
ProShares Short and ProShares Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Short and ProShares Short
The main advantage of trading using opposite ProShares Short and ProShares Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Short position performs unexpectedly, ProShares Short 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 Short will offset losses from the drop in ProShares Short's long position.| ProShares Short vs. Direxion Daily SP | ProShares Short vs. Direxion Daily Semiconductor | ProShares Short vs. Direxion Daily Technology |
| ProShares Short vs. ProShares Short QQQ | ProShares Short vs. ProShares Short Dow30 | ProShares Short vs. ProShares UltraShort SP500 | ProShares Short vs. ProShares Short Russell2000 |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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