Correlation Between ProShares UltraShort and Pacer Funds
Can any of the company-specific risk be diversified away by investing in both ProShares UltraShort and Pacer 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 Pacer 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 Pacer Funds Trust, you can compare the effects of market volatilities on ProShares UltraShort and Pacer 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 Pacer Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraShort and Pacer Funds.
Diversification Opportunities for ProShares UltraShort and Pacer Funds
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ProShares and Pacer is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraShort 20 and Pacer Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer 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 Pacer Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Funds Trust has no effect on the direction of ProShares UltraShort i.e., ProShares UltraShort and Pacer Funds go up and down completely randomly.
Pair Corralation between ProShares UltraShort and Pacer Funds
Considering the 90-day investment horizon ProShares UltraShort 20 is expected to under-perform the Pacer Funds. In addition to that, ProShares UltraShort is 1.46 times more volatile than Pacer Funds Trust. It trades about -0.04 of its total potential returns per unit of risk. Pacer Funds Trust is currently generating about 0.09 per unit of volatility. If you would invest 4,927 in Pacer Funds Trust on August 30, 2024 and sell it today you would earn a total of 139.00 from holding Pacer Funds Trust or generate 2.82% 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. Pacer Funds Trust
Performance |
| Timeline |
| ProShares UltraShort |
| Pacer Funds Trust |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
ProShares UltraShort and Pacer Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares UltraShort and Pacer Funds
The main advantage of trading using opposite ProShares UltraShort and Pacer Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraShort position performs unexpectedly, Pacer 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 Pacer Funds will offset losses from the drop in Pacer 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 |
| Pacer Funds vs. Freedom Day Dividend | Pacer Funds vs. Franklin Templeton ETF | Pacer Funds vs. iShares MSCI China | Pacer Funds vs. Tidal Trust II |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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