Correlation Between ProShares Ultra and AdvisorShares Trust
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and AdvisorShares Trust 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 AdvisorShares Trust 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 AdvisorShares Trust , you can compare the effects of market volatilities on ProShares Ultra and AdvisorShares Trust 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 AdvisorShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and AdvisorShares Trust.
Diversification Opportunities for ProShares Ultra and AdvisorShares Trust
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ProShares and AdvisorShares is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra SP500 and AdvisorShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AdvisorShares Trust 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 AdvisorShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AdvisorShares Trust has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and AdvisorShares Trust go up and down completely randomly.
Pair Corralation between ProShares Ultra and AdvisorShares Trust
Considering the 90-day investment horizon ProShares Ultra SP500 is expected to generate 0.18 times more return on investment than AdvisorShares Trust. However, ProShares Ultra SP500 is 5.64 times less risky than AdvisorShares Trust. It trades about 0.09 of its potential returns per unit of risk. AdvisorShares Trust is currently generating about -0.01 per unit of risk. If you would invest 5,073 in ProShares Ultra SP500 on November 2, 2024 and sell it today you would earn a total of 4,725 from holding ProShares Ultra SP500 or generate 93.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra SP500 vs. AdvisorShares Trust
Performance |
| Timeline |
| ProShares Ultra SP500 |
| AdvisorShares Trust |
ProShares Ultra and AdvisorShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and AdvisorShares Trust
The main advantage of trading using opposite ProShares Ultra and AdvisorShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, AdvisorShares Trust 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 AdvisorShares Trust will offset losses from the drop in AdvisorShares Trust'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 |
| AdvisorShares Trust vs. Verano Holdings Corp | AdvisorShares Trust vs. Amplify ETF Trust | AdvisorShares Trust vs. Ascend Wellness Holdings | AdvisorShares Trust vs. AdvisorShares Pure Cannabis |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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