Correlation Between ProShares UltraShort and SPDR SSGA
Can any of the company-specific risk be diversified away by investing in both ProShares UltraShort and SPDR SSGA 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 SPDR SSGA 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 SPDR SSGA My2028, you can compare the effects of market volatilities on ProShares UltraShort and SPDR SSGA 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 SPDR SSGA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraShort and SPDR SSGA.
Diversification Opportunities for ProShares UltraShort and SPDR SSGA
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ProShares and SPDR is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraShort 20 and SPDR SSGA My2028 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SSGA My2028 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 SPDR SSGA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SSGA My2028 has no effect on the direction of ProShares UltraShort i.e., ProShares UltraShort and SPDR SSGA go up and down completely randomly.
Pair Corralation between ProShares UltraShort and SPDR SSGA
Considering the 90-day investment horizon ProShares UltraShort 20 is expected to under-perform the SPDR SSGA. In addition to that, ProShares UltraShort is 10.41 times more volatile than SPDR SSGA My2028. It trades about -0.03 of its total potential returns per unit of risk. SPDR SSGA My2028 is currently generating about 0.1 per unit of volatility. If you would invest 2,463 in SPDR SSGA My2028 on November 3, 2024 and sell it today you would earn a total of 7.00 from holding SPDR SSGA My2028 or generate 0.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares UltraShort 20 vs. SPDR SSGA My2028
Performance |
| Timeline |
| ProShares UltraShort |
| SPDR SSGA My2028 |
ProShares UltraShort and SPDR SSGA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares UltraShort and SPDR SSGA
The main advantage of trading using opposite ProShares UltraShort and SPDR SSGA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraShort position performs unexpectedly, SPDR SSGA 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 SPDR SSGA will offset losses from the drop in SPDR SSGA'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 |
| SPDR SSGA vs. VanEck Vectors Moodys | SPDR SSGA vs. Valued Advisers Trust | SPDR SSGA vs. Xtrackers California Municipal | SPDR SSGA vs. Principal Exchange Traded Funds |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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