Correlation Between ProShares Ultra and Invesco China
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and Invesco China 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 Invesco China 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 Invesco China Technology, you can compare the effects of market volatilities on ProShares Ultra and Invesco China 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 Invesco China. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and Invesco China.
Diversification Opportunities for ProShares Ultra and Invesco China
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ProShares and Invesco is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Euro and Invesco China Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco China Technology 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 Invesco China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco China Technology has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Invesco China go up and down completely randomly.
Pair Corralation between ProShares Ultra and Invesco China
Considering the 90-day investment horizon ProShares Ultra Euro is expected to under-perform the Invesco China. But the etf apears to be less risky and, when comparing its historical volatility, ProShares Ultra Euro is 1.9 times less risky than Invesco China. The etf trades about -0.16 of its potential returns per unit of risk. The Invesco China Technology is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 4,056 in Invesco China Technology on September 2, 2024 and sell it today you would earn a total of 1.00 from holding Invesco China Technology or generate 0.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra Euro vs. Invesco China Technology
Performance |
| Timeline |
| ProShares Ultra Euro |
| Invesco China Technology |
ProShares Ultra and Invesco China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and Invesco China
The main advantage of trading using opposite ProShares Ultra and Invesco China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, Invesco China 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 Invesco China will offset losses from the drop in Invesco China'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 |
| Invesco China vs. KraneShares CSI China | Invesco China vs. iShares MSCI China | Invesco China vs. Global X MSCI | Invesco China vs. Xtrackers Harvest CSI |
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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