Correlation Between ProShares UltraShort and Listed Funds
Can any of the company-specific risk be diversified away by investing in both ProShares UltraShort and Listed Funds 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 Listed Funds 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 Listed Funds Trust, you can compare the effects of market volatilities on ProShares UltraShort and Listed Funds 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 Listed Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraShort and Listed Funds.
Diversification Opportunities for ProShares UltraShort and Listed Funds
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ProShares and Listed is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraShort 20 and Listed Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Listed Funds Trust 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 Listed Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Listed Funds Trust has no effect on the direction of ProShares UltraShort i.e., ProShares UltraShort and Listed Funds go up and down completely randomly.
Pair Corralation between ProShares UltraShort and Listed Funds
Considering the 90-day investment horizon ProShares UltraShort 20 is expected to under-perform the Listed Funds. In addition to that, ProShares UltraShort is 2.91 times more volatile than Listed Funds Trust. It trades about -0.01 of its total potential returns per unit of risk. Listed Funds Trust is currently generating about 0.17 per unit of volatility. If you would invest 2,990 in Listed Funds Trust on August 31, 2024 and sell it today you would earn a total of 428.00 from holding Listed Funds Trust or generate 14.31% 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. Listed Funds Trust
Performance |
| Timeline |
| ProShares UltraShort |
| Listed Funds Trust |
ProShares UltraShort and Listed Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares UltraShort and Listed Funds
The main advantage of trading using opposite ProShares UltraShort and Listed Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraShort position performs unexpectedly, Listed Funds 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 Listed Funds will offset losses from the drop in Listed Funds' 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 |
| Listed Funds vs. iShares Core SP | Listed Funds vs. iShares Core MSCI | Listed Funds vs. iShares Broad USD | Listed Funds vs. iShares Core SP |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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