Correlation Between AXS TSLA and ProShares UltraShort
Can any of the company-specific risk be diversified away by investing in both AXS TSLA and ProShares UltraShort 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 AXS TSLA and ProShares UltraShort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AXS TSLA Bear and ProShares UltraShort Basic, you can compare the effects of market volatilities on AXS TSLA and ProShares UltraShort 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 AXS TSLA with a short position of ProShares UltraShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXS TSLA and ProShares UltraShort.
Diversification Opportunities for AXS TSLA and ProShares UltraShort
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between AXS and ProShares is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding AXS TSLA Bear and ProShares UltraShort Basic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort and AXS TSLA 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 AXS TSLA Bear are associated (or correlated) with ProShares UltraShort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares UltraShort has no effect on the direction of AXS TSLA i.e., AXS TSLA and ProShares UltraShort go up and down completely randomly.
Pair Corralation between AXS TSLA and ProShares UltraShort
Given the investment horizon of 90 days AXS TSLA Bear is expected to generate 70.85 times more return on investment than ProShares UltraShort. However, AXS TSLA is 70.85 times more volatile than ProShares UltraShort Basic. It trades about 0.19 of its potential returns per unit of risk. ProShares UltraShort Basic is currently generating about -0.06 per unit of risk. If you would invest 1,621 in AXS TSLA Bear on September 1, 2024 and sell it today you would earn a total of 2,684 from holding AXS TSLA Bear or generate 165.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AXS TSLA Bear vs. ProShares UltraShort Basic
Performance |
| Timeline |
| AXS TSLA Bear |
| ProShares UltraShort |
AXS TSLA and ProShares UltraShort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AXS TSLA and ProShares UltraShort
The main advantage of trading using opposite AXS TSLA and ProShares UltraShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXS TSLA position performs unexpectedly, ProShares UltraShort 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 UltraShort will offset losses from the drop in ProShares UltraShort's long position.| AXS TSLA vs. AXS 125X NVDA | AXS TSLA vs. Direxion Shares ETF | AXS TSLA vs. Direxion Shares ETF | AXS TSLA vs. Tuttle Capital Short |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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