Correlation Between ProShares UltraPro and ProShares UltraPro
Can any of the company-specific risk be diversified away by investing in both ProShares UltraPro and ProShares UltraPro 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 UltraPro and ProShares UltraPro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares UltraPro Short and ProShares UltraPro Short, you can compare the effects of market volatilities on ProShares UltraPro and ProShares UltraPro 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 UltraPro with a short position of ProShares UltraPro. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraPro and ProShares UltraPro.
Diversification Opportunities for ProShares UltraPro and ProShares UltraPro
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ProShares and ProShares is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraPro Short and ProShares UltraPro Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraPro Short and ProShares UltraPro 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 UltraPro Short are associated (or correlated) with ProShares UltraPro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares UltraPro Short has no effect on the direction of ProShares UltraPro i.e., ProShares UltraPro and ProShares UltraPro go up and down completely randomly.
Pair Corralation between ProShares UltraPro and ProShares UltraPro
Given the investment horizon of 90 days ProShares UltraPro Short is expected to generate 0.57 times more return on investment than ProShares UltraPro. However, ProShares UltraPro Short is 1.75 times less risky than ProShares UltraPro. It trades about -0.26 of its potential returns per unit of risk. ProShares UltraPro Short is currently generating about -0.22 per unit of risk. If you would invest 5,292 in ProShares UltraPro Short on August 30, 2024 and sell it today you would lose (846.00) from holding ProShares UltraPro Short or give up 15.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares UltraPro Short vs. ProShares UltraPro Short
Performance |
| Timeline |
| ProShares UltraPro Short |
| ProShares UltraPro Short |
ProShares UltraPro and ProShares UltraPro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares UltraPro and ProShares UltraPro
The main advantage of trading using opposite ProShares UltraPro and ProShares UltraPro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraPro position performs unexpectedly, ProShares UltraPro 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 UltraPro will offset losses from the drop in ProShares UltraPro's long position.| ProShares UltraPro vs. ProShares UltraPro Dow30 | ProShares UltraPro vs. ProShares UltraPro Short | ProShares UltraPro vs. ProShares UltraPro Short | ProShares UltraPro vs. ProShares UltraPro Short |
| ProShares UltraPro vs. Dimensional ETF Trust | ProShares UltraPro vs. Vanguard Small Cap Index | ProShares UltraPro vs. First Trust Multi Manager | ProShares UltraPro vs. Vanguard SP Small Cap |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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