Correlation Between ProShares and ProShares Ultra
Can any of the company-specific risk be diversified away by investing in both ProShares and ProShares Ultra 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 and ProShares Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares SP 500 and ProShares Ultra High, you can compare the effects of market volatilities on ProShares and ProShares Ultra 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 with a short position of ProShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares and ProShares Ultra.
Diversification Opportunities for ProShares and ProShares Ultra
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ProShares and ProShares is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding ProShares SP 500 and ProShares Ultra High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Ultra High and ProShares 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 SP 500 are associated (or correlated) with ProShares Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Ultra High has no effect on the direction of ProShares i.e., ProShares and ProShares Ultra go up and down completely randomly.
Pair Corralation between ProShares and ProShares Ultra
Given the investment horizon of 90 days ProShares SP 500 is expected to generate 1.89 times more return on investment than ProShares Ultra. However, ProShares is 1.89 times more volatile than ProShares Ultra High. It trades about 0.17 of its potential returns per unit of risk. ProShares Ultra High is currently generating about -0.02 per unit of risk. If you would invest 6,117 in ProShares SP 500 on August 28, 2024 and sell it today you would earn a total of 350.00 from holding ProShares SP 500 or generate 5.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares SP 500 vs. ProShares Ultra High
Performance |
| Timeline |
| ProShares SP 500 |
| ProShares Ultra High |
ProShares and ProShares Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares and ProShares Ultra
The main advantage of trading using opposite ProShares and ProShares Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares position performs unexpectedly, ProShares Ultra 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 ProShares Ultra will offset losses from the drop in ProShares Ultra's long position.| ProShares vs. ProShares SP 500 | ProShares vs. ProShares SP 500 | ProShares vs. ProShares SP 500 | ProShares vs. ProShares Ultra High |
| ProShares Ultra vs. Direxion Daily 7 10 | ProShares Ultra vs. Direxion Daily 20 | ProShares Ultra vs. Direxion Daily Real | ProShares Ultra vs. Direxion Daily Mid |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |