Correlation Between ProShares Ultra and Kovitz Core
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and Kovitz Core 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 Kovitz Core 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 Kovitz Core Equity, you can compare the effects of market volatilities on ProShares Ultra and Kovitz Core 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 Kovitz Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and Kovitz Core.
Diversification Opportunities for ProShares Ultra and Kovitz Core
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and Kovitz is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Euro and Kovitz Core Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kovitz Core Equity 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 Kovitz Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kovitz Core Equity has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Kovitz Core go up and down completely randomly.
Pair Corralation between ProShares Ultra and Kovitz Core
Considering the 90-day investment horizon ProShares Ultra Euro is expected to under-perform the Kovitz Core. In addition to that, ProShares Ultra is 1.15 times more volatile than Kovitz Core Equity. It trades about -0.05 of its total potential returns per unit of risk. Kovitz Core Equity is currently generating about 0.14 per unit of volatility. If you would invest 2,132 in Kovitz Core Equity on September 1, 2024 and sell it today you would earn a total of 315.00 from holding Kovitz Core Equity or generate 14.77% 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. Kovitz Core Equity
Performance |
| Timeline |
| ProShares Ultra Euro |
| Kovitz Core Equity |
ProShares Ultra and Kovitz Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and Kovitz Core
The main advantage of trading using opposite ProShares Ultra and Kovitz Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, Kovitz Core 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 Kovitz Core will offset losses from the drop in Kovitz Core'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 |
| Kovitz Core vs. Vanguard Total Stock | Kovitz Core vs. SPDR SP 500 | Kovitz Core vs. iShares Core SP | Kovitz Core 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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