Correlation Between ProShares Ultra and MAX S
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and MAX S 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 MAX S 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 MAX S P, you can compare the effects of market volatilities on ProShares Ultra and MAX S 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 MAX S. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and MAX S.
Diversification Opportunities for ProShares Ultra and MAX S
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between ProShares and MAX is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra SP500 and MAX S P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAX S P 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 MAX S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAX S P has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and MAX S go up and down completely randomly.
Pair Corralation between ProShares Ultra and MAX S
Considering the 90-day investment horizon ProShares Ultra is expected to generate 1.74 times less return on investment than MAX S. But when comparing it to its historical volatility, ProShares Ultra SP500 is 2.0 times less risky than MAX S. It trades about 0.14 of its potential returns per unit of risk. MAX S P is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 4,732 in MAX S P on August 26, 2024 and sell it today you would earn a total of 388.00 from holding MAX S P or generate 8.2% 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. MAX S P
Performance |
| Timeline |
| ProShares Ultra SP500 |
| MAX S P |
ProShares Ultra and MAX S Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and MAX S
The main advantage of trading using opposite ProShares Ultra and MAX S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, MAX S 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 MAX S will offset losses from the drop in MAX S'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 |
| MAX S vs. Direxion Daily SP | MAX S vs. Direxion Daily Semiconductor | MAX S 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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