Correlation Between AXS 2X and ProShares UltraShort
Can any of the company-specific risk be diversified away by investing in both AXS 2X and ProShares UltraShort 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 UltraShort 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 UltraShort Bloomberg, you can compare the effects of market volatilities on AXS 2X and ProShares UltraShort 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 UltraShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXS 2X and ProShares UltraShort.
Diversification Opportunities for AXS 2X and ProShares UltraShort
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AXS and ProShares is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding AXS 2X Innovation and ProShares UltraShort Bloomberg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort 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 UltraShort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares UltraShort has no effect on the direction of AXS 2X i.e., AXS 2X and ProShares UltraShort go up and down completely randomly.
Pair Corralation between AXS 2X and ProShares UltraShort
Given the investment horizon of 90 days AXS 2X Innovation is expected to generate 0.5 times more return on investment than ProShares UltraShort. However, AXS 2X Innovation is 1.98 times less risky than ProShares UltraShort. It trades about 0.1 of its potential returns per unit of risk. ProShares UltraShort Bloomberg is currently generating about 0.01 per unit of risk. If you would invest 5,030 in AXS 2X Innovation on November 5, 2024 and sell it today you would earn a total of 319.00 from holding AXS 2X Innovation or generate 6.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AXS 2X Innovation vs. ProShares UltraShort Bloomberg
Performance |
| Timeline |
| AXS 2X Innovation |
| ProShares UltraShort |
AXS 2X and ProShares UltraShort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AXS 2X and ProShares UltraShort
The main advantage of trading using opposite AXS 2X and ProShares UltraShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXS 2X position performs unexpectedly, ProShares UltraShort 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 UltraShort will offset losses from the drop in ProShares UltraShort'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 |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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