Correlation Between ProShares UltraShort and BNY Mellon
Can any of the company-specific risk be diversified away by investing in both ProShares UltraShort and BNY Mellon 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 BNY Mellon 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 BNY Mellon High, you can compare the effects of market volatilities on ProShares UltraShort and BNY Mellon 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 BNY Mellon. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraShort and BNY Mellon.
Diversification Opportunities for ProShares UltraShort and BNY Mellon
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ProShares and BNY is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraShort 20 and BNY Mellon High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNY Mellon High 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 BNY Mellon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNY Mellon High has no effect on the direction of ProShares UltraShort i.e., ProShares UltraShort and BNY Mellon go up and down completely randomly.
Pair Corralation between ProShares UltraShort and BNY Mellon
Considering the 90-day investment horizon ProShares UltraShort is expected to generate 14.36 times less return on investment than BNY Mellon. In addition to that, ProShares UltraShort is 2.21 times more volatile than BNY Mellon High. It trades about 0.0 of its total potential returns per unit of risk. BNY Mellon High is currently generating about 0.14 per unit of volatility. If you would invest 229.00 in BNY Mellon High on August 24, 2024 and sell it today you would earn a total of 35.00 from holding BNY Mellon High or generate 15.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
ProShares UltraShort 20 vs. BNY Mellon High
Performance |
| Timeline |
| ProShares UltraShort |
| BNY Mellon High |
ProShares UltraShort and BNY Mellon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares UltraShort and BNY Mellon
The main advantage of trading using opposite ProShares UltraShort and BNY Mellon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraShort position performs unexpectedly, BNY Mellon 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 BNY Mellon will offset losses from the drop in BNY Mellon'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 |
| BNY Mellon vs. Credit Suisse Asset | BNY Mellon vs. Mfs Intermediate High | BNY Mellon vs. Eaton Vance Risk | BNY Mellon vs. Nuveen Floating Rate |
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 Stocks Directory module to find actively traded stocks across global markets.
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