Correlation Between AXS 2X and ProShares Trust
Can any of the company-specific risk be diversified away by investing in both AXS 2X and ProShares Trust 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 AXS 2X and ProShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AXS 2X Innovation and ProShares Trust , you can compare the effects of market volatilities on AXS 2X and ProShares Trust 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 AXS 2X with a short position of ProShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXS 2X and ProShares Trust.
Diversification Opportunities for AXS 2X and ProShares Trust
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AXS and ProShares is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding AXS 2X Innovation and ProShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Trust and AXS 2X 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 AXS 2X Innovation are associated (or correlated) with ProShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Trust has no effect on the direction of AXS 2X i.e., AXS 2X and ProShares Trust go up and down completely randomly.
Pair Corralation between AXS 2X and ProShares Trust
Given the investment horizon of 90 days AXS 2X Innovation is expected to generate 2.27 times more return on investment than ProShares Trust. However, AXS 2X is 2.27 times more volatile than ProShares Trust . It trades about 0.01 of its potential returns per unit of risk. ProShares Trust is currently generating about -0.19 per unit of risk. If you would invest 6,613 in AXS 2X Innovation on October 26, 2024 and sell it today you would lose (1,371) from holding AXS 2X Innovation or give up 20.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AXS 2X Innovation vs. ProShares Trust
Performance |
| Timeline |
| AXS 2X Innovation |
| ProShares Trust |
AXS 2X and ProShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AXS 2X and ProShares Trust
The main advantage of trading using opposite AXS 2X and ProShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXS 2X position performs unexpectedly, ProShares Trust 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 ProShares Trust will offset losses from the drop in ProShares Trust's long position.| AXS 2X vs. Tuttle Capital Short | AXS 2X vs. Direxion Shares ETF | AXS 2X vs. AXS TSLA Bear | AXS 2X vs. 2x Long VIX |
| ProShares Trust vs. AXS TSLA Bear | ProShares Trust vs. Tuttle Capital Short | ProShares Trust vs. ProShares Bitcoin Strategy | ProShares Trust vs. ProShares UltraShort Bloomberg |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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