Correlation Between ProShares Ultra and Franklin Liberty
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and Franklin Liberty 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 Franklin Liberty 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 Franklin Liberty Systematic, you can compare the effects of market volatilities on ProShares Ultra and Franklin Liberty 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 Franklin Liberty. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and Franklin Liberty.
Diversification Opportunities for ProShares Ultra and Franklin Liberty
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ProShares and Franklin is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Euro and Franklin Liberty Systematic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Liberty Sys 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 Franklin Liberty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Liberty Sys has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Franklin Liberty go up and down completely randomly.
Pair Corralation between ProShares Ultra and Franklin Liberty
Considering the 90-day investment horizon ProShares Ultra Euro is expected to under-perform the Franklin Liberty. In addition to that, ProShares Ultra is 1.61 times more volatile than Franklin Liberty Systematic. It trades about -0.09 of its total potential returns per unit of risk. Franklin Liberty Systematic is currently generating about 0.06 per unit of volatility. If you would invest 2,338 in Franklin Liberty Systematic on September 4, 2024 and sell it today you would earn a total of 71.00 from holding Franklin Liberty Systematic or generate 3.04% 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. Franklin Liberty Systematic
Performance |
| Timeline |
| ProShares Ultra Euro |
| Franklin Liberty Sys |
ProShares Ultra and Franklin Liberty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and Franklin Liberty
The main advantage of trading using opposite ProShares Ultra and Franklin Liberty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, Franklin Liberty 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 Franklin Liberty will offset losses from the drop in Franklin Liberty'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 |
| Franklin Liberty vs. First Trust Multi Asset | Franklin Liberty vs. Collaborative Investment Series | Franklin Liberty vs. EA Series Trust | Franklin Liberty vs. Ocean Park International |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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