Correlation Between ProShares UltraShort and Tema ETF
Can any of the company-specific risk be diversified away by investing in both ProShares UltraShort and Tema 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 Tema 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 Tema ETF Trust, you can compare the effects of market volatilities on ProShares UltraShort and Tema 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 Tema ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraShort and Tema ETF.
Diversification Opportunities for ProShares UltraShort and Tema ETF
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ProShares and Tema is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraShort 20 and Tema ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tema 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 Tema ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tema ETF Trust has no effect on the direction of ProShares UltraShort i.e., ProShares UltraShort and Tema ETF go up and down completely randomly.
Pair Corralation between ProShares UltraShort and Tema ETF
Considering the 90-day investment horizon ProShares UltraShort is expected to generate 1.63 times less return on investment than Tema ETF. In addition to that, ProShares UltraShort is 1.23 times more volatile than Tema ETF Trust. It trades about 0.1 of its total potential returns per unit of risk. Tema ETF Trust is currently generating about 0.19 per unit of volatility. If you would invest 3,797 in Tema ETF Trust on August 24, 2024 and sell it today you would earn a total of 252.00 from holding Tema ETF Trust or generate 6.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares UltraShort 20 vs. Tema ETF Trust
Performance |
| Timeline |
| ProShares UltraShort |
| Tema ETF Trust |
ProShares UltraShort and Tema ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares UltraShort and Tema ETF
The main advantage of trading using opposite ProShares UltraShort and Tema ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraShort position performs unexpectedly, Tema 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 Tema ETF will offset losses from the drop in Tema ETF'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 |
| Tema ETF vs. Franklin Templeton ETF | Tema ETF vs. Tidal Trust II | Tema ETF vs. Tidal Trust II | Tema ETF vs. iShares Dividend and |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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