Correlation Between ProShares UltraShort and PGIM ETF
Can any of the company-specific risk be diversified away by investing in both ProShares UltraShort and PGIM ETF 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 PGIM ETF 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 PGIM ETF Trust, you can compare the effects of market volatilities on ProShares UltraShort and PGIM ETF 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 PGIM ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraShort and PGIM ETF.
Diversification Opportunities for ProShares UltraShort and PGIM ETF
-0.96 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and PGIM is -0.96. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraShort 20 and PGIM ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PGIM ETF 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 PGIM ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PGIM ETF Trust has no effect on the direction of ProShares UltraShort i.e., ProShares UltraShort and PGIM ETF go up and down completely randomly.
Pair Corralation between ProShares UltraShort and PGIM ETF
Considering the 90-day investment horizon ProShares UltraShort 20 is expected to generate 6.34 times more return on investment than PGIM ETF. However, ProShares UltraShort is 6.34 times more volatile than PGIM ETF Trust. It trades about 0.12 of its potential returns per unit of risk. PGIM ETF Trust is currently generating about -0.09 per unit of risk. If you would invest 3,329 in ProShares UltraShort 20 on August 25, 2024 and sell it today you would earn a total of 166.00 from holding ProShares UltraShort 20 or generate 4.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares UltraShort 20 vs. PGIM ETF Trust
Performance |
| Timeline |
| ProShares UltraShort |
| PGIM ETF Trust |
ProShares UltraShort and PGIM ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares UltraShort and PGIM ETF
The main advantage of trading using opposite ProShares UltraShort and PGIM ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraShort position performs unexpectedly, PGIM ETF 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 PGIM ETF will offset losses from the drop in PGIM ETF's long position.| ProShares UltraShort vs. Direxion Daily 20 | ProShares UltraShort vs. Direxion Daily 7 10 | ProShares UltraShort vs. ProShares Short 20 |
| PGIM ETF vs. iShares MSCI EAFE | PGIM ETF vs. iShares iBoxx Investment | PGIM ETF vs. iShares TIPS Bond | PGIM ETF vs. iShares 1 3 Year |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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