Correlation Between ProShares Ultra and VanEck Investment
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and VanEck Investment 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 VanEck Investment 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 VanEck Investment Grade, you can compare the effects of market volatilities on ProShares Ultra and VanEck Investment 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 VanEck Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and VanEck Investment.
Diversification Opportunities for ProShares Ultra and VanEck Investment
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and VanEck is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Euro and VanEck Investment Grade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Investment Grade 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 VanEck Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Investment Grade has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and VanEck Investment go up and down completely randomly.
Pair Corralation between ProShares Ultra and VanEck Investment
Considering the 90-day investment horizon ProShares Ultra is expected to generate 8.76 times less return on investment than VanEck Investment. In addition to that, ProShares Ultra is 5.86 times more volatile than VanEck Investment Grade. It trades about 0.0 of its total potential returns per unit of risk. VanEck Investment Grade is currently generating about 0.19 per unit of volatility. If you would invest 2,213 in VanEck Investment Grade on September 2, 2024 and sell it today you would earn a total of 339.00 from holding VanEck Investment Grade or generate 15.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra Euro vs. VanEck Investment Grade
Performance |
| Timeline |
| ProShares Ultra Euro |
| VanEck Investment Grade |
ProShares Ultra and VanEck Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and VanEck Investment
The main advantage of trading using opposite ProShares Ultra and VanEck Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, VanEck Investment 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 VanEck Investment will offset losses from the drop in VanEck Investment'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 |
| VanEck Investment vs. iShares Interest Rate | VanEck Investment vs. iShares Interest Rate | VanEck Investment vs. iShares Edge Investment | VanEck Investment vs. iShares Inflation Hedged |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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