Correlation Between ProShares Ultra and UBS AG
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and UBS AG 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 UBS AG 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 UBS AG London, you can compare the effects of market volatilities on ProShares Ultra and UBS AG 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 UBS AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and UBS AG.
Diversification Opportunities for ProShares Ultra and UBS AG
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ProShares and UBS is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra SP500 and UBS AG London in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS AG London 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 UBS AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS AG London has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and UBS AG go up and down completely randomly.
Pair Corralation between ProShares Ultra and UBS AG
Considering the 90-day investment horizon ProShares Ultra is expected to generate 1.22 times less return on investment than UBS AG. But when comparing it to its historical volatility, ProShares Ultra SP500 is 1.2 times less risky than UBS AG. It trades about 0.12 of its potential returns per unit of risk. UBS AG London is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,545 in UBS AG London on August 30, 2024 and sell it today you would earn a total of 3,060 from holding UBS AG London or generate 120.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra SP500 vs. UBS AG London
Performance |
| Timeline |
| ProShares Ultra SP500 |
| UBS AG London |
ProShares Ultra and UBS AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and UBS AG
The main advantage of trading using opposite ProShares Ultra and UBS AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, UBS AG 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 UBS AG will offset losses from the drop in UBS AG's long position.| ProShares Ultra vs. ProShares Ultra QQQ | ProShares Ultra vs. ProShares Ultra Dow30 | ProShares Ultra vs. ProShares UltraShort SP500 | ProShares Ultra vs. ProShares Ultra Financials |
| UBS AG vs. Freedom Day Dividend | UBS AG vs. Franklin Templeton ETF | UBS AG vs. iShares MSCI China | UBS AG 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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