Correlation Between ProShares UltraPro and AXS 125X
Can any of the company-specific risk be diversified away by investing in both ProShares UltraPro and AXS 125X 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 AXS 125X 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 AXS 125X NVDA, you can compare the effects of market volatilities on ProShares UltraPro and AXS 125X 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 AXS 125X. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraPro and AXS 125X.
Diversification Opportunities for ProShares UltraPro and AXS 125X
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ProShares and AXS is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraPro Short and AXS 125X NVDA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXS 125X NVDA 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 AXS 125X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXS 125X NVDA has no effect on the direction of ProShares UltraPro i.e., ProShares UltraPro and AXS 125X go up and down completely randomly.
Pair Corralation between ProShares UltraPro and AXS 125X
Given the investment horizon of 90 days ProShares UltraPro Short is expected to under-perform the AXS 125X. But the etf apears to be less risky and, when comparing its historical volatility, ProShares UltraPro Short is 1.42 times less risky than AXS 125X. The etf trades about -0.13 of its potential returns per unit of risk. The AXS 125X NVDA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,764 in AXS 125X NVDA on August 30, 2024 and sell it today you would earn a total of 130.00 from holding AXS 125X NVDA or generate 4.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
ProShares UltraPro Short vs. AXS 125X NVDA
Performance |
| Timeline |
| ProShares UltraPro Short |
| AXS 125X NVDA |
ProShares UltraPro and AXS 125X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares UltraPro and AXS 125X
The main advantage of trading using opposite ProShares UltraPro and AXS 125X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraPro position performs unexpectedly, AXS 125X 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 AXS 125X will offset losses from the drop in AXS 125X'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 |
| AXS 125X vs. AXS TSLA Bear | AXS 125X vs. Direxion Shares ETF | AXS 125X vs. Direxion Shares ETF | AXS 125X vs. Direxion Shares ETF |
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 Channel module to use Commodity Channel Index to analyze current equity momentum.
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