Correlation Between ProShares UltraPro and Invesco New
Can any of the company-specific risk be diversified away by investing in both ProShares UltraPro and Invesco New 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 UltraPro and Invesco New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares UltraPro QQQ and Invesco New York, you can compare the effects of market volatilities on ProShares UltraPro and Invesco New 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 UltraPro with a short position of Invesco New. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraPro and Invesco New.
Diversification Opportunities for ProShares UltraPro and Invesco New
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ProShares and Invesco is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraPro QQQ and Invesco New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco New York and ProShares UltraPro 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 UltraPro QQQ are associated (or correlated) with Invesco New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco New York has no effect on the direction of ProShares UltraPro i.e., ProShares UltraPro and Invesco New go up and down completely randomly.
Pair Corralation between ProShares UltraPro and Invesco New
Given the investment horizon of 90 days ProShares UltraPro QQQ is expected to generate 6.85 times more return on investment than Invesco New. However, ProShares UltraPro is 6.85 times more volatile than Invesco New York. It trades about 0.24 of its potential returns per unit of risk. Invesco New York is currently generating about 0.19 per unit of risk. If you would invest 6,945 in ProShares UltraPro QQQ on September 1, 2024 and sell it today you would earn a total of 1,044 from holding ProShares UltraPro QQQ or generate 15.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares UltraPro QQQ vs. Invesco New York
Performance |
| Timeline |
| ProShares UltraPro QQQ |
| Invesco New York |
ProShares UltraPro and Invesco New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares UltraPro and Invesco New
The main advantage of trading using opposite ProShares UltraPro and Invesco New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraPro position performs unexpectedly, Invesco New 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 Invesco New will offset losses from the drop in Invesco New's long position.| ProShares UltraPro vs. ProShares UltraPro Short | ProShares UltraPro vs. Direxion Daily Semiconductor | ProShares UltraPro vs. ProShares UltraPro SP500 | ProShares UltraPro vs. Direxion Daily SP500 |
| Invesco New vs. Invesco California AMT Free | Invesco New vs. iShares New York | Invesco New vs. Invesco VRDO Tax Free | Invesco New vs. Invesco National AMT Free |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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