Correlation Between T Rex and ProShares UltraShort
Can any of the company-specific risk be diversified away by investing in both T Rex 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 T Rex and ProShares UltraShort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between T Rex 2X Inverse and ProShares UltraShort FTSE, you can compare the effects of market volatilities on T Rex 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 T Rex with a short position of ProShares UltraShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of T Rex and ProShares UltraShort.
Diversification Opportunities for T Rex and ProShares UltraShort
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between TSLZ and ProShares is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding T Rex 2X Inverse and ProShares UltraShort FTSE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort FTSE and T Rex 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 T Rex 2X Inverse 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 FTSE has no effect on the direction of T Rex i.e., T Rex and ProShares UltraShort go up and down completely randomly.
Pair Corralation between T Rex and ProShares UltraShort
Given the investment horizon of 90 days T Rex 2X Inverse is expected to under-perform the ProShares UltraShort. In addition to that, T Rex is 4.74 times more volatile than ProShares UltraShort FTSE. It trades about -0.14 of its total potential returns per unit of risk. ProShares UltraShort FTSE is currently generating about 0.06 per unit of volatility. If you would invest 3,482 in ProShares UltraShort FTSE on September 3, 2024 and sell it today you would earn a total of 458.00 from holding ProShares UltraShort FTSE or generate 13.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
T Rex 2X Inverse vs. ProShares UltraShort FTSE
Performance |
| Timeline |
| T Rex 2X |
| ProShares UltraShort FTSE |
T Rex and ProShares UltraShort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with T Rex and ProShares UltraShort
The main advantage of trading using opposite T Rex and ProShares UltraShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T Rex 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.| T Rex vs. ProShares UltraShort FTSE | T Rex vs. ProShares UltraShort MSCI | T Rex vs. ProShares Ultra MSCI | T Rex vs. ProShares UltraShort MSCI |
| ProShares UltraShort vs. ProShares UltraShort MSCI | ProShares UltraShort vs. ProShares Ultra MSCI | ProShares UltraShort vs. ProShares UltraShort MSCI | ProShares UltraShort vs. Direxion Daily MSCI |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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