Correlation Between ProShares Supply and US Global
Can any of the company-specific risk be diversified away by investing in both ProShares Supply and US Global 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 Supply and US Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Supply Chain and US Global Sea, you can compare the effects of market volatilities on ProShares Supply and US Global 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 Supply with a short position of US Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Supply and US Global.
Diversification Opportunities for ProShares Supply and US Global
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between ProShares and SEA is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Supply Chain and US Global Sea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Global Sea and ProShares Supply 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 Supply Chain are associated (or correlated) with US Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Global Sea has no effect on the direction of ProShares Supply i.e., ProShares Supply and US Global go up and down completely randomly.
Pair Corralation between ProShares Supply and US Global
Given the investment horizon of 90 days ProShares Supply Chain is expected to generate 0.76 times more return on investment than US Global. However, ProShares Supply Chain is 1.31 times less risky than US Global. It trades about 0.23 of its potential returns per unit of risk. US Global Sea is currently generating about -0.19 per unit of risk. If you would invest 4,045 in ProShares Supply Chain on September 1, 2024 and sell it today you would earn a total of 147.00 from holding ProShares Supply Chain or generate 3.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Supply Chain vs. US Global Sea
Performance |
| Timeline |
| ProShares Supply Chain |
| US Global Sea |
ProShares Supply and US Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Supply and US Global
The main advantage of trading using opposite ProShares Supply and US Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Supply position performs unexpectedly, US Global 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 US Global will offset losses from the drop in US Global's long position.| ProShares Supply vs. Industrial Select Sector | ProShares Supply vs. Driven Brands Holdings | ProShares Supply vs. iShares Industrials ETF | ProShares Supply vs. iShares Transportation Average |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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