Correlation Between ProShares UltraPro and IPath Series
Can any of the company-specific risk be diversified away by investing in both ProShares UltraPro and IPath Series 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 IPath Series 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 iPath Series B, you can compare the effects of market volatilities on ProShares UltraPro and IPath Series 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 IPath Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraPro and IPath Series.
Diversification Opportunities for ProShares UltraPro and IPath Series
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ProShares and IPath is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraPro Short and iPath Series B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iPath Series B 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 IPath Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iPath Series B has no effect on the direction of ProShares UltraPro i.e., ProShares UltraPro and IPath Series go up and down completely randomly.
Pair Corralation between ProShares UltraPro and IPath Series
Given the investment horizon of 90 days ProShares UltraPro Short is expected to under-perform the IPath Series. But the etf apears to be less risky and, when comparing its historical volatility, ProShares UltraPro Short is 1.66 times less risky than IPath Series. The etf trades about -0.05 of its potential returns per unit of risk. The iPath Series B is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 4,596 in iPath Series B on August 24, 2024 and sell it today you would earn a total of 169.00 from holding iPath Series B or generate 3.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares UltraPro Short vs. iPath Series B
Performance |
| Timeline |
| ProShares UltraPro Short |
| iPath Series B |
ProShares UltraPro and IPath Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares UltraPro and IPath Series
The main advantage of trading using opposite ProShares UltraPro and IPath Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraPro position performs unexpectedly, IPath Series 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 IPath Series will offset losses from the drop in IPath Series' long position.| ProShares UltraPro vs. ABIVAX Socit Anonyme | ProShares UltraPro vs. SCOR PK | ProShares UltraPro vs. HUMANA INC | ProShares UltraPro vs. Aquagold International |
| IPath Series vs. ProShares Ultra VIX | IPath Series vs. ProShares Short VIX | IPath Series vs. ProShares UltraPro Short | IPath Series vs. iShares 20 Year |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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