Correlation Between ProShares Ultra and T Rex
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and T Rex 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 T Rex 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 T Rex 2X Long, you can compare the effects of market volatilities on ProShares Ultra and T Rex 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 T Rex. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and T Rex.
Diversification Opportunities for ProShares Ultra and T Rex
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ProShares and NVDX is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra SP500 and T Rex 2X Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Rex 2X 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 T Rex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Rex 2X has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and T Rex go up and down completely randomly.
Pair Corralation between ProShares Ultra and T Rex
Considering the 90-day investment horizon ProShares Ultra SP500 is expected to generate 0.36 times more return on investment than T Rex. However, ProShares Ultra SP500 is 2.75 times less risky than T Rex. It trades about 0.14 of its potential returns per unit of risk. T Rex 2X Long is currently generating about 0.01 per unit of risk. If you would invest 9,131 in ProShares Ultra SP500 on August 26, 2024 and sell it today you would earn a total of 461.00 from holding ProShares Ultra SP500 or generate 5.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra SP500 vs. T Rex 2X Long
Performance |
| Timeline |
| ProShares Ultra SP500 |
| T Rex 2X |
ProShares Ultra and T Rex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and T Rex
The main advantage of trading using opposite ProShares Ultra and T Rex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, T Rex 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 T Rex will offset losses from the drop in T Rex'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 |
| T Rex vs. Direxion Daily SP | T Rex vs. Direxion Daily Semiconductor | T Rex vs. Direxion Daily Semiconductor |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |