Correlation Between ProShares Ultra and United States
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and United States 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 Ultra and United States into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Ultra Bloomberg and United States Oil, you can compare the effects of market volatilities on ProShares Ultra and United States 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 Ultra with a short position of United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and United States.
Diversification Opportunities for ProShares Ultra and United States
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ProShares and United is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Bloomberg and United States Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Oil and ProShares Ultra 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 Ultra Bloomberg are associated (or correlated) with United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Oil has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and United States go up and down completely randomly.
Pair Corralation between ProShares Ultra and United States
Considering the 90-day investment horizon ProShares Ultra Bloomberg is expected to generate 1.76 times more return on investment than United States. However, ProShares Ultra is 1.76 times more volatile than United States Oil. It trades about 0.02 of its potential returns per unit of risk. United States Oil is currently generating about 0.02 per unit of risk. If you would invest 2,563 in ProShares Ultra Bloomberg on August 28, 2024 and sell it today you would earn a total of 18.00 from holding ProShares Ultra Bloomberg or generate 0.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra Bloomberg vs. United States Oil
Performance |
| Timeline |
| ProShares Ultra Bloomberg |
| United States Oil |
ProShares Ultra and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and United States
The main advantage of trading using opposite ProShares Ultra and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.| ProShares Ultra vs. ProShares UltraShort Bloomberg | ProShares Ultra vs. United States Oil | ProShares Ultra vs. Direxion Daily Energy | ProShares Ultra vs. Direxion Daily SP |
| United States vs. United States Natural | United States vs. SPDR Gold Shares | United States vs. ProShares Ultra Bloomberg | United States vs. Energy Select Sector |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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