Correlation Between ProShares UltraShort and Direxion Auspice
Can any of the company-specific risk be diversified away by investing in both ProShares UltraShort and Direxion Auspice 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 UltraShort and Direxion Auspice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares UltraShort 20 and Direxion Auspice Broad, you can compare the effects of market volatilities on ProShares UltraShort and Direxion Auspice 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 UltraShort with a short position of Direxion Auspice. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraShort and Direxion Auspice.
Diversification Opportunities for ProShares UltraShort and Direxion Auspice
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ProShares and Direxion is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraShort 20 and Direxion Auspice Broad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direxion Auspice Broad and ProShares UltraShort 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 UltraShort 20 are associated (or correlated) with Direxion Auspice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direxion Auspice Broad has no effect on the direction of ProShares UltraShort i.e., ProShares UltraShort and Direxion Auspice go up and down completely randomly.
Pair Corralation between ProShares UltraShort and Direxion Auspice
Considering the 90-day investment horizon ProShares UltraShort 20 is expected to generate 4.34 times more return on investment than Direxion Auspice. However, ProShares UltraShort is 4.34 times more volatile than Direxion Auspice Broad. It trades about 0.03 of its potential returns per unit of risk. Direxion Auspice Broad is currently generating about 0.0 per unit of risk. If you would invest 2,790 in ProShares UltraShort 20 on August 31, 2024 and sell it today you would earn a total of 472.00 from holding ProShares UltraShort 20 or generate 16.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares UltraShort 20 vs. Direxion Auspice Broad
Performance |
| Timeline |
| ProShares UltraShort |
| Direxion Auspice Broad |
ProShares UltraShort and Direxion Auspice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares UltraShort and Direxion Auspice
The main advantage of trading using opposite ProShares UltraShort and Direxion Auspice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraShort position performs unexpectedly, Direxion Auspice 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 Direxion Auspice will offset losses from the drop in Direxion Auspice's long position.| ProShares UltraShort vs. ProShares UltraShort 7 10 | ProShares UltraShort vs. ProShares UltraShort SP500 | ProShares UltraShort vs. iShares 20 Year | ProShares UltraShort vs. Direxion Daily 20 |
| Direxion Auspice vs. GraniteShares Bloomberg Commodity | Direxion Auspice vs. abrdn Bloomberg All | Direxion Auspice vs. iShares Bloomberg Roll | Direxion Auspice vs. abrdn Bloomberg All |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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