Correlation Between TSJA and ProShares Trust
Can any of the company-specific risk be diversified away by investing in both TSJA and ProShares Trust 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 TSJA and ProShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TSJA and ProShares Trust , you can compare the effects of market volatilities on TSJA and ProShares Trust 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 TSJA with a short position of ProShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of TSJA and ProShares Trust.
Diversification Opportunities for TSJA and ProShares Trust
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between TSJA and ProShares is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding TSJA and ProShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Trust and TSJA 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 TSJA are associated (or correlated) with ProShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Trust has no effect on the direction of TSJA i.e., TSJA and ProShares Trust go up and down completely randomly.
Pair Corralation between TSJA and ProShares Trust
Given the investment horizon of 90 days TSJA is expected to generate 0.21 times more return on investment than ProShares Trust. However, TSJA is 4.75 times less risky than ProShares Trust. It trades about 0.12 of its potential returns per unit of risk. ProShares Trust is currently generating about -0.11 per unit of risk. If you would invest 2,441 in TSJA on August 27, 2024 and sell it today you would earn a total of 332.00 from holding TSJA or generate 13.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 31.85% |
| Values | Daily Returns |
TSJA vs. ProShares Trust
Performance |
| Timeline |
| TSJA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ProShares Trust |
TSJA and ProShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TSJA and ProShares Trust
The main advantage of trading using opposite TSJA and ProShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TSJA position performs unexpectedly, ProShares Trust 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 ProShares Trust will offset losses from the drop in ProShares Trust's long position.The idea behind TSJA and ProShares Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| ProShares Trust vs. AXS TSLA Bear | ProShares Trust vs. Tuttle Capital Short | ProShares Trust vs. ProShares Bitcoin Strategy | ProShares Trust vs. ProShares UltraShort Bloomberg |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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