Correlation Between ProShares Ultra and FSMO
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and FSMO 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 FSMO 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 FSMO, you can compare the effects of market volatilities on ProShares Ultra and FSMO 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 FSMO. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and FSMO.
Diversification Opportunities for ProShares Ultra and FSMO
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and FSMO is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Euro and FSMO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FSMO 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 FSMO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FSMO has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and FSMO go up and down completely randomly.
Pair Corralation between ProShares Ultra and FSMO
If you would invest 2,244 in FSMO on September 1, 2024 and sell it today you would earn a total of 0.00 from holding FSMO or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 0.79% |
| Values | Daily Returns |
ProShares Ultra Euro vs. FSMO
Performance |
| Timeline |
| ProShares Ultra Euro |
| FSMO |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ProShares Ultra and FSMO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and FSMO
The main advantage of trading using opposite ProShares Ultra and FSMO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, FSMO 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 FSMO will offset losses from the drop in FSMO'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 |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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