Correlation Between ProShares and VanEck BDC
Can any of the company-specific risk be diversified away by investing in both ProShares and VanEck BDC 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 and VanEck BDC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares DJ Brookfield and VanEck BDC Income, you can compare the effects of market volatilities on ProShares and VanEck BDC 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 with a short position of VanEck BDC. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares and VanEck BDC.
Diversification Opportunities for ProShares and VanEck BDC
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between ProShares and VanEck is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding ProShares DJ Brookfield and VanEck BDC Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck BDC Income and ProShares 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 DJ Brookfield are associated (or correlated) with VanEck BDC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck BDC Income has no effect on the direction of ProShares i.e., ProShares and VanEck BDC go up and down completely randomly.
Pair Corralation between ProShares and VanEck BDC
Given the investment horizon of 90 days ProShares is expected to generate 2.49 times less return on investment than VanEck BDC. But when comparing it to its historical volatility, ProShares DJ Brookfield is 1.06 times less risky than VanEck BDC. It trades about 0.04 of its potential returns per unit of risk. VanEck BDC Income is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,233 in VanEck BDC Income on November 2, 2024 and sell it today you would earn a total of 505.00 from holding VanEck BDC Income or generate 40.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
ProShares DJ Brookfield vs. VanEck BDC Income
Performance |
| Timeline |
| ProShares DJ Brookfield |
| VanEck BDC Income |
ProShares and VanEck BDC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares and VanEck BDC
The main advantage of trading using opposite ProShares and VanEck BDC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares position performs unexpectedly, VanEck BDC 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 VanEck BDC will offset losses from the drop in VanEck BDC's long position.| ProShares vs. FlexShares STOXX Global | ProShares vs. SPDR SP Global | ProShares vs. iShares Infrastructure ETF | ProShares vs. iShares Global Infrastructure |
| VanEck BDC vs. Virtus InfraCap Preferred | VanEck BDC vs. VanEck Mortgage REIT | VanEck BDC vs. XAI Octagon Floating | VanEck BDC vs. Amplify High Income |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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