Correlation Between AXS 2X and ProShares Ultra
Can any of the company-specific risk be diversified away by investing in both AXS 2X and ProShares Ultra 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 Ultra 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 Ultra SP500, you can compare the effects of market volatilities on AXS 2X and ProShares Ultra 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 Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXS 2X and ProShares Ultra.
Diversification Opportunities for AXS 2X and ProShares Ultra
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AXS and ProShares is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding AXS 2X Innovation and ProShares Ultra SP500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Ultra SP500 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 Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Ultra SP500 has no effect on the direction of AXS 2X i.e., AXS 2X and ProShares Ultra go up and down completely randomly.
Pair Corralation between AXS 2X and ProShares Ultra
Given the investment horizon of 90 days AXS 2X Innovation is expected to under-perform the ProShares Ultra. In addition to that, AXS 2X is 3.71 times more volatile than ProShares Ultra SP500. It trades about -0.01 of its total potential returns per unit of risk. ProShares Ultra SP500 is currently generating about 0.13 per unit of volatility. If you would invest 7,463 in ProShares Ultra SP500 on September 3, 2024 and sell it today you would earn a total of 2,344 from holding ProShares Ultra SP500 or generate 31.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AXS 2X Innovation vs. ProShares Ultra SP500
Performance |
| Timeline |
| AXS 2X Innovation |
| ProShares Ultra SP500 |
AXS 2X and ProShares Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AXS 2X and ProShares Ultra
The main advantage of trading using opposite AXS 2X and ProShares Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXS 2X position performs unexpectedly, ProShares Ultra 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 Ultra will offset losses from the drop in ProShares Ultra's long position.| AXS 2X vs. ProShares Ultra SP500 | AXS 2X vs. Direxion Daily SP500 | AXS 2X vs. ProShares Ultra QQQ | AXS 2X vs. Direxion Daily Technology |
| ProShares Ultra vs. ProShares Ultra QQQ | ProShares Ultra vs. ProShares Ultra Dow30 | ProShares Ultra vs. ProShares UltraShort SP500 | ProShares Ultra vs. ProShares Ultra Financials |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |