Correlation Between ProShares Ultra and WisdomTree Europe
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and WisdomTree Europe 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 Ultra and WisdomTree Europe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Ultra SP500 and WisdomTree Europe SmallCap, you can compare the effects of market volatilities on ProShares Ultra and WisdomTree Europe 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 Ultra with a short position of WisdomTree Europe. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and WisdomTree Europe.
Diversification Opportunities for ProShares Ultra and WisdomTree Europe
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ProShares and WisdomTree is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra SP500 and WisdomTree Europe SmallCap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Europe and ProShares Ultra 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 Ultra SP500 are associated (or correlated) with WisdomTree Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Europe has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and WisdomTree Europe go up and down completely randomly.
Pair Corralation between ProShares Ultra and WisdomTree Europe
Considering the 90-day investment horizon ProShares Ultra SP500 is expected to generate 2.42 times more return on investment than WisdomTree Europe. However, ProShares Ultra is 2.42 times more volatile than WisdomTree Europe SmallCap. It trades about 0.35 of its potential returns per unit of risk. WisdomTree Europe SmallCap is currently generating about 0.63 per unit of risk. If you would invest 5,595 in ProShares Ultra SP500 on October 18, 2025 and sell it today you would earn a total of 359.00 from holding ProShares Ultra SP500 or generate 6.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
ProShares Ultra SP500 vs. WisdomTree Europe SmallCap
Performance |
| Timeline |
| ProShares Ultra SP500 |
| WisdomTree Europe |
ProShares Ultra and WisdomTree Europe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and WisdomTree Europe
The main advantage of trading using opposite ProShares Ultra and WisdomTree Europe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, WisdomTree Europe 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 WisdomTree Europe will offset losses from the drop in WisdomTree Europe's long position.| ProShares Ultra vs. First Trust Cboe | ProShares Ultra vs. Schwab REIT ETF | ProShares Ultra vs. First Trust Capital | ProShares Ultra vs. Alpha Architect 1 3 |
| WisdomTree Europe vs. WisdomTree International MidCap | WisdomTree Europe vs. iShares MSCI Turkey | WisdomTree Europe vs. iShares Currency Hedged | WisdomTree Europe vs. iShares MSCI Japan |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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