Correlation Between VelocityShares Daily and ProShares Ultra
Can any of the company-specific risk be diversified away by investing in both VelocityShares Daily and ProShares Ultra 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 VelocityShares Daily and ProShares Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VelocityShares Daily 2x and ProShares Ultra VIX, you can compare the effects of market volatilities on VelocityShares Daily and ProShares Ultra 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 VelocityShares Daily with a short position of ProShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of VelocityShares Daily and ProShares Ultra.
Diversification Opportunities for VelocityShares Daily and ProShares Ultra
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between VelocityShares and ProShares is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding VelocityShares Daily 2x and ProShares Ultra VIX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Ultra VIX and VelocityShares Daily 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 VelocityShares Daily 2x are associated (or correlated) with ProShares Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Ultra VIX has no effect on the direction of VelocityShares Daily i.e., VelocityShares Daily and ProShares Ultra go up and down completely randomly.
Pair Corralation between VelocityShares Daily and ProShares Ultra
If you would invest 35.00 in VelocityShares Daily 2x on September 4, 2024 and sell it today you would earn a total of 0.00 from holding VelocityShares Daily 2x or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 0.37% |
| Values | Daily Returns |
VelocityShares Daily 2x vs. ProShares Ultra VIX
Performance |
| Timeline |
| VelocityShares Daily |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ProShares Ultra VIX |
VelocityShares Daily and ProShares Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VelocityShares Daily and ProShares Ultra
The main advantage of trading using opposite VelocityShares Daily and ProShares Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VelocityShares Daily position performs unexpectedly, ProShares Ultra 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 Ultra will offset losses from the drop in ProShares Ultra's long position.| VelocityShares Daily vs. ProShares VIX Short Term | VelocityShares Daily vs. ProShares Short VIX | VelocityShares Daily vs. ProShares VIX Mid Term | VelocityShares Daily vs. ProShares Ultra VIX |
| ProShares Ultra vs. ProShares UltraPro Short | ProShares Ultra vs. ProShares Short VIX | ProShares Ultra vs. iPath Series B | ProShares Ultra vs. ProShares UltraPro QQQ |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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