Correlation Between ProShares UltraPro and T Rex
Can any of the company-specific risk be diversified away by investing in both ProShares UltraPro and T Rex 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 T Rex 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 T Rex 2X Inverse, you can compare the effects of market volatilities on ProShares UltraPro and T Rex 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 T Rex. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraPro and T Rex.
Diversification Opportunities for ProShares UltraPro and T Rex
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ProShares and TSLZ is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraPro Short and T Rex 2X Inverse in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Rex 2X 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 T Rex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Rex 2X has no effect on the direction of ProShares UltraPro i.e., ProShares UltraPro and T Rex go up and down completely randomly.
Pair Corralation between ProShares UltraPro and T Rex
Given the investment horizon of 90 days ProShares UltraPro Short is expected to generate 0.26 times more return on investment than T Rex. However, ProShares UltraPro Short is 3.86 times less risky than T Rex. It trades about -0.15 of its potential returns per unit of risk. T Rex 2X Inverse is currently generating about -0.25 per unit of risk. If you would invest 2,361 in ProShares UltraPro Short on August 29, 2024 and sell it today you would lose (218.00) from holding ProShares UltraPro Short or give up 9.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares UltraPro Short vs. T Rex 2X Inverse
Performance |
| Timeline |
| ProShares UltraPro Short |
| T Rex 2X |
ProShares UltraPro and T Rex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares UltraPro and T Rex
The main advantage of trading using opposite ProShares UltraPro and T Rex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraPro position performs unexpectedly, T Rex 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 T Rex will offset losses from the drop in T Rex'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 |
| T Rex vs. Freedom Day Dividend | T Rex vs. Franklin Templeton ETF | T Rex vs. iShares MSCI China | T Rex vs. Tidal Trust II |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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