Correlation Between ProShares Ultra and Morgan Stanley
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and Morgan Stanley 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 Morgan Stanley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Ultra Euro and Morgan Stanley ETF, you can compare the effects of market volatilities on ProShares Ultra and Morgan Stanley 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 Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and Morgan Stanley.
Diversification Opportunities for ProShares Ultra and Morgan Stanley
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and Morgan is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Euro and Morgan Stanley ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley ETF 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 Euro are associated (or correlated) with Morgan Stanley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morgan Stanley ETF has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Morgan Stanley go up and down completely randomly.
Pair Corralation between ProShares Ultra and Morgan Stanley
Considering the 90-day investment horizon ProShares Ultra Euro is expected to under-perform the Morgan Stanley. But the etf apears to be less risky and, when comparing its historical volatility, ProShares Ultra Euro is 1.01 times less risky than Morgan Stanley. The etf trades about -0.05 of its potential returns per unit of risk. The Morgan Stanley ETF is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 6,461 in Morgan Stanley ETF on September 1, 2024 and sell it today you would earn a total of 861.00 from holding Morgan Stanley ETF or generate 13.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
ProShares Ultra Euro vs. Morgan Stanley ETF
Performance |
| Timeline |
| ProShares Ultra Euro |
| Morgan Stanley ETF |
ProShares Ultra and Morgan Stanley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and Morgan Stanley
The main advantage of trading using opposite ProShares Ultra and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, Morgan Stanley 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 Morgan Stanley will offset losses from the drop in Morgan Stanley's long position.| ProShares Ultra vs. ProShares Ultra Yen | ProShares Ultra vs. ProShares UltraShort Yen | ProShares Ultra vs. ProShares UltraShort Euro | ProShares Ultra vs. ProShares Ultra Consumer |
| Morgan Stanley vs. Vanguard Total Stock | Morgan Stanley vs. SPDR SP 500 | Morgan Stanley vs. iShares Core SP | Morgan Stanley vs. Vanguard Dividend Appreciation |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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