Correlation Between ProShares Ultra and GraniteShares 125x
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and GraniteShares 125x 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 GraniteShares 125x 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 GraniteShares 125x Long, you can compare the effects of market volatilities on ProShares Ultra and GraniteShares 125x 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 GraniteShares 125x. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and GraniteShares 125x.
Diversification Opportunities for ProShares Ultra and GraniteShares 125x
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ProShares and GraniteShares is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra SP500 and GraniteShares 125x Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares 125x Long 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 GraniteShares 125x. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GraniteShares 125x Long has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and GraniteShares 125x go up and down completely randomly.
Pair Corralation between ProShares Ultra and GraniteShares 125x
Considering the 90-day investment horizon ProShares Ultra is expected to generate 6.28 times less return on investment than GraniteShares 125x. But when comparing it to its historical volatility, ProShares Ultra SP500 is 3.6 times less risky than GraniteShares 125x. It trades about 0.14 of its potential returns per unit of risk. GraniteShares 125x Long is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1,063 in GraniteShares 125x Long on August 30, 2024 and sell it today you would earn a total of 371.00 from holding GraniteShares 125x Long or generate 34.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra SP500 vs. GraniteShares 125x Long
Performance |
| Timeline |
| ProShares Ultra SP500 |
| GraniteShares 125x Long |
ProShares Ultra and GraniteShares 125x Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and GraniteShares 125x
The main advantage of trading using opposite ProShares Ultra and GraniteShares 125x positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, GraniteShares 125x 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 GraniteShares 125x will offset losses from the drop in GraniteShares 125x'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 |
| GraniteShares 125x vs. Canadian Solar | GraniteShares 125x vs. Emeren Group | GraniteShares 125x vs. First Solar | GraniteShares 125x vs. Ascent Solar Technologies, |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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