Correlation Between ProShares UltraShort and Research Affiliates
Can any of the company-specific risk be diversified away by investing in both ProShares UltraShort and Research Affiliates 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 Research Affiliates 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 Research Affiliates Deletions, you can compare the effects of market volatilities on ProShares UltraShort and Research Affiliates 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 Research Affiliates. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraShort and Research Affiliates.
Diversification Opportunities for ProShares UltraShort and Research Affiliates
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ProShares and Research is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraShort 20 and Research Affiliates Deletions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Research Affiliates 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 Research Affiliates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Research Affiliates has no effect on the direction of ProShares UltraShort i.e., ProShares UltraShort and Research Affiliates go up and down completely randomly.
Pair Corralation between ProShares UltraShort and Research Affiliates
Considering the 90-day investment horizon ProShares UltraShort is expected to generate 29.3 times less return on investment than Research Affiliates. In addition to that, ProShares UltraShort is 1.3 times more volatile than Research Affiliates Deletions. It trades about 0.0 of its total potential returns per unit of risk. Research Affiliates Deletions is currently generating about 0.15 per unit of volatility. If you would invest 2,587 in Research Affiliates Deletions on October 23, 2024 and sell it today you would earn a total of 71.00 from holding Research Affiliates Deletions or generate 2.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
ProShares UltraShort 20 vs. Research Affiliates Deletions
Performance |
| Timeline |
| ProShares UltraShort |
| Research Affiliates |
ProShares UltraShort and Research Affiliates Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares UltraShort and Research Affiliates
The main advantage of trading using opposite ProShares UltraShort and Research Affiliates positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraShort position performs unexpectedly, Research Affiliates 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 Research Affiliates will offset losses from the drop in Research Affiliates' 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 |
| Research Affiliates vs. FT Vest Equity | Research Affiliates vs. Northern Lights | Research Affiliates vs. Dimensional International High | Research Affiliates vs. JPMorgan Fundamental Data |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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