Correlation Between ProShares Short and FT Cboe
Can any of the company-specific risk be diversified away by investing in both ProShares Short and FT Cboe 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 Cboe 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 Cboe Vest, you can compare the effects of market volatilities on ProShares Short and FT Cboe 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 Cboe. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Short and FT Cboe.
Diversification Opportunities for ProShares Short and FT Cboe
-0.99 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and DJUL is -0.99. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Short SP500 and FT Cboe Vest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FT Cboe Vest 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 Cboe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FT Cboe Vest has no effect on the direction of ProShares Short i.e., ProShares Short and FT Cboe go up and down completely randomly.
Pair Corralation between ProShares Short and FT Cboe
Allowing for the 90-day total investment horizon ProShares Short SP500 is expected to under-perform the FT Cboe. In addition to that, ProShares Short is 1.95 times more volatile than FT Cboe Vest. It trades about -0.09 of its total potential returns per unit of risk. FT Cboe Vest is currently generating about 0.16 per unit of volatility. If you would invest 3,721 in FT Cboe Vest on August 29, 2024 and sell it today you would earn a total of 515.00 from holding FT Cboe Vest or generate 13.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Short SP500 vs. FT Cboe Vest
Performance |
| Timeline |
| ProShares Short SP500 |
| FT Cboe Vest |
ProShares Short and FT Cboe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Short and FT Cboe
The main advantage of trading using opposite ProShares Short and FT Cboe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Short position performs unexpectedly, FT Cboe 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 Cboe will offset losses from the drop in FT Cboe'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 Cboe vs. ABIVAX Socit Anonyme | FT Cboe vs. Pinnacle Sherman Multi Strategy | FT Cboe vs. Morningstar Unconstrained Allocation | FT Cboe vs. SPACE |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |