Correlation Between ProShares UltraPro and NKEQ
Can any of the company-specific risk be diversified away by investing in both ProShares UltraPro and NKEQ 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 NKEQ 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 NKEQ, you can compare the effects of market volatilities on ProShares UltraPro and NKEQ 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 NKEQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraPro and NKEQ.
Diversification Opportunities for ProShares UltraPro and NKEQ
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ProShares and NKEQ is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraPro Short and NKEQ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NKEQ 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 NKEQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NKEQ has no effect on the direction of ProShares UltraPro i.e., ProShares UltraPro and NKEQ go up and down completely randomly.
Pair Corralation between ProShares UltraPro and NKEQ
Given the investment horizon of 90 days ProShares UltraPro Short is expected to under-perform the NKEQ. In addition to that, ProShares UltraPro is 3.9 times more volatile than NKEQ. It trades about -0.09 of its total potential returns per unit of risk. NKEQ is currently generating about 0.0 per unit of volatility. If you would invest 2,895 in NKEQ on September 12, 2024 and sell it today you would earn a total of 0.00 from holding NKEQ or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 1.88% |
| Values | Daily Returns |
ProShares UltraPro Short vs. NKEQ
Performance |
| Timeline |
| ProShares UltraPro Short |
| NKEQ |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ProShares UltraPro and NKEQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares UltraPro and NKEQ
The main advantage of trading using opposite ProShares UltraPro and NKEQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraPro position performs unexpectedly, NKEQ 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 NKEQ will offset losses from the drop in NKEQ's long position.| ProShares UltraPro vs. ProShares UltraPro Short | ProShares UltraPro vs. ProShares UltraPro Short | ProShares UltraPro vs. ProShares UltraPro SP500 | ProShares UltraPro vs. Direxion Daily SP |
| NKEQ vs. ProShares UltraShort MSCI | NKEQ vs. ProShares UltraShort MSCI | NKEQ vs. ProShares UltraShort Euro | NKEQ vs. ProShares UltraShort MSCI |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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