Correlation Between ProShares Supply and TCW ETF
Can any of the company-specific risk be diversified away by investing in both ProShares Supply and TCW ETF 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 TCW ETF 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 TCW ETF Trust, you can compare the effects of market volatilities on ProShares Supply and TCW ETF 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 TCW ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Supply and TCW ETF.
Diversification Opportunities for ProShares Supply and TCW ETF
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ProShares and TCW is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Supply Chain and TCW ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TCW ETF Trust 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 TCW ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TCW ETF Trust has no effect on the direction of ProShares Supply i.e., ProShares Supply and TCW ETF go up and down completely randomly.
Pair Corralation between ProShares Supply and TCW ETF
If you would invest 4,033 in ProShares Supply Chain on August 26, 2024 and sell it today you would earn a total of 144.00 from holding ProShares Supply Chain or generate 3.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.0% |
| Values | Daily Returns |
ProShares Supply Chain vs. TCW ETF Trust
Performance |
| Timeline |
| ProShares Supply Chain |
| TCW ETF Trust |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
ProShares Supply and TCW ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Supply and TCW ETF
The main advantage of trading using opposite ProShares Supply and TCW ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Supply position performs unexpectedly, TCW ETF 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 TCW ETF will offset losses from the drop in TCW ETF's long position.| ProShares Supply vs. First Trust Exchange Traded | ProShares Supply vs. Northern Lights | ProShares Supply vs. First Trust Exchange Traded |
| TCW ETF vs. TCW ETF Trust | TCW ETF vs. SPDR SP 500 | TCW ETF vs. BlackRock Carbon Transition | TCW ETF vs. iShares Small Cap |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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