Correlation Between ProShares Short and FT Vest
Can any of the company-specific risk be diversified away by investing in both ProShares Short and FT Vest 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 FT Vest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Short SP500 and FT Vest Equity, you can compare the effects of market volatilities on ProShares Short and FT Vest 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 FT Vest. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Short and FT Vest.
Diversification Opportunities for ProShares Short and FT Vest
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ProShares and DHDG is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Short SP500 and FT Vest Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FT Vest Equity 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 SP500 are associated (or correlated) with FT Vest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FT Vest Equity has no effect on the direction of ProShares Short i.e., ProShares Short and FT Vest go up and down completely randomly.
Pair Corralation between ProShares Short and FT Vest
Allowing for the 90-day total investment horizon ProShares Short SP500 is expected to under-perform the FT Vest. In addition to that, ProShares Short is 1.97 times more volatile than FT Vest Equity. It trades about -0.15 of its total potential returns per unit of risk. FT Vest Equity is currently generating about 0.21 per unit of volatility. If you would invest 3,035 in FT Vest Equity on August 29, 2024 and sell it today you would earn a total of 62.00 from holding FT Vest Equity or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Short SP500 vs. FT Vest Equity
Performance |
| Timeline |
| ProShares Short SP500 |
| FT Vest Equity |
ProShares Short and FT Vest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Short and FT Vest
The main advantage of trading using opposite ProShares Short and FT Vest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Short position performs unexpectedly, FT Vest 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 FT Vest will offset losses from the drop in FT Vest's long position.| ProShares Short vs. ProShares Short QQQ | ProShares Short vs. ProShares Short Dow30 | ProShares Short vs. ProShares UltraShort SP500 | ProShares Short vs. ProShares Short Russell2000 |
| FT Vest vs. Northern Lights | FT Vest vs. Dimensional International High | FT Vest vs. First Trust Exchange Traded | FT Vest vs. EA Series Trust |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |