Correlation Between SPDR SP and ProShares UltraPro
Can any of the company-specific risk be diversified away by investing in both SPDR SP and ProShares UltraPro 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 SPDR SP and ProShares UltraPro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP 500 and ProShares UltraPro Short, you can compare the effects of market volatilities on SPDR SP and ProShares UltraPro 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 SPDR SP with a short position of ProShares UltraPro. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and ProShares UltraPro.
Diversification Opportunities for SPDR SP and ProShares UltraPro
-0.98 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SPDR and ProShares is -0.98. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP 500 and ProShares UltraPro Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraPro Short and SPDR SP 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 SPDR SP 500 are associated (or correlated) with ProShares UltraPro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares UltraPro Short has no effect on the direction of SPDR SP i.e., SPDR SP and ProShares UltraPro go up and down completely randomly.
Pair Corralation between SPDR SP and ProShares UltraPro
Considering the 90-day investment horizon SPDR SP 500 is expected to generate 0.24 times more return on investment than ProShares UltraPro. However, SPDR SP 500 is 4.21 times less risky than ProShares UltraPro. It trades about 0.12 of its potential returns per unit of risk. ProShares UltraPro Short is currently generating about -0.1 per unit of risk. If you would invest 38,736 in SPDR SP 500 on September 3, 2024 and sell it today you would earn a total of 21,519 from holding SPDR SP 500 or generate 55.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SP 500 vs. ProShares UltraPro Short
Performance |
| Timeline |
| SPDR SP 500 |
| ProShares UltraPro Short |
SPDR SP and ProShares UltraPro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and ProShares UltraPro
The main advantage of trading using opposite SPDR SP and ProShares UltraPro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, ProShares UltraPro 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 UltraPro will offset losses from the drop in ProShares UltraPro's long position.| SPDR SP vs. SPDR Gold Shares | SPDR SP vs. Vanguard Real Estate | SPDR SP vs. Vanguard Total Stock | SPDR SP vs. Vanguard FTSE Emerging |
| ProShares UltraPro vs. ProShares UltraPro QQQ | ProShares UltraPro vs. ProShares UltraPro Short | ProShares UltraPro vs. ProShares UltraPro Short | ProShares UltraPro vs. ProShares Ultra VIX |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |