Correlation Between ProShares UltraShort and WisdomTree Continuous
Can any of the company-specific risk be diversified away by investing in both ProShares UltraShort and WisdomTree Continuous 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 UltraShort and WisdomTree Continuous into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares UltraShort Bloomberg and WisdomTree Continuous Commodity, you can compare the effects of market volatilities on ProShares UltraShort and WisdomTree Continuous 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 UltraShort with a short position of WisdomTree Continuous. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraShort and WisdomTree Continuous.
Diversification Opportunities for ProShares UltraShort and WisdomTree Continuous
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ProShares and WisdomTree is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraShort Bloomberg and WisdomTree Continuous Commodit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Continuous and ProShares UltraShort 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 UltraShort Bloomberg are associated (or correlated) with WisdomTree Continuous. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Continuous has no effect on the direction of ProShares UltraShort i.e., ProShares UltraShort and WisdomTree Continuous go up and down completely randomly.
Pair Corralation between ProShares UltraShort and WisdomTree Continuous
Considering the 90-day investment horizon ProShares UltraShort is expected to generate 2.27 times less return on investment than WisdomTree Continuous. In addition to that, ProShares UltraShort is 3.61 times more volatile than WisdomTree Continuous Commodity. It trades about 0.01 of its total potential returns per unit of risk. WisdomTree Continuous Commodity is currently generating about 0.1 per unit of volatility. If you would invest 1,513 in WisdomTree Continuous Commodity on October 9, 2025 and sell it today you would earn a total of 697.00 from holding WisdomTree Continuous Commodity or generate 46.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares UltraShort Bloomberg vs. WisdomTree Continuous Commodit
Performance |
| Timeline |
| ProShares UltraShort |
| WisdomTree Continuous |
ProShares UltraShort and WisdomTree Continuous Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares UltraShort and WisdomTree Continuous
The main advantage of trading using opposite ProShares UltraShort and WisdomTree Continuous positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraShort position performs unexpectedly, WisdomTree Continuous 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 WisdomTree Continuous will offset losses from the drop in WisdomTree Continuous' long position.| ProShares UltraShort vs. ProShares UltraShort Bloomberg | ProShares UltraShort vs. Invesco DB Dollar | ProShares UltraShort vs. Direxion Daily CSI | ProShares UltraShort vs. 1x Short VIX |
| WisdomTree Continuous vs. VanEck Natural Resources | WisdomTree Continuous vs. Direxion Auspice Broad | WisdomTree Continuous vs. Ballast SmallMid Cap | WisdomTree Continuous vs. AIM ETF Products |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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