Correlation Between IShares Global and ProShares Ultra
Can any of the company-specific risk be diversified away by investing in both IShares Global and ProShares Ultra 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 IShares Global and ProShares Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Global Consumer and ProShares Ultra VIX, you can compare the effects of market volatilities on IShares Global and ProShares Ultra 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 IShares Global with a short position of ProShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Global and ProShares Ultra.
Diversification Opportunities for IShares Global and ProShares Ultra
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IShares and ProShares is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding iShares Global Consumer and ProShares Ultra VIX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Ultra VIX and IShares Global 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 iShares Global Consumer are associated (or correlated) with ProShares Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Ultra VIX has no effect on the direction of IShares Global i.e., IShares Global and ProShares Ultra go up and down completely randomly.
Pair Corralation between IShares Global and ProShares Ultra
Considering the 90-day investment horizon iShares Global Consumer is expected to generate 0.15 times more return on investment than ProShares Ultra. However, iShares Global Consumer is 6.63 times less risky than ProShares Ultra. It trades about 0.06 of its potential returns per unit of risk. ProShares Ultra VIX is currently generating about -0.03 per unit of risk. If you would invest 15,541 in iShares Global Consumer on October 24, 2024 and sell it today you would earn a total of 3,432 from holding iShares Global Consumer or generate 22.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Global Consumer vs. ProShares Ultra VIX
Performance |
| Timeline |
| iShares Global Consumer |
| ProShares Ultra VIX |
IShares Global and ProShares Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Global and ProShares Ultra
The main advantage of trading using opposite IShares Global and ProShares Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Global position performs unexpectedly, ProShares Ultra 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 Ultra will offset losses from the drop in ProShares Ultra's long position.| IShares Global vs. iShares Global Industrials | IShares Global vs. iShares Global Consumer | IShares Global vs. iShares Global Utilities | IShares Global vs. iShares Global Materials |
| ProShares Ultra vs. ProShares UltraPro Short | ProShares Ultra vs. ProShares Short VIX | ProShares Ultra vs. iPath Series B | ProShares Ultra vs. ProShares UltraPro QQQ |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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