Correlation Between ProShares Ultra and Gotham Enhanced
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and Gotham Enhanced 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 Gotham Enhanced 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 Gotham Enhanced 500, you can compare the effects of market volatilities on ProShares Ultra and Gotham Enhanced 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 Gotham Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and Gotham Enhanced.
Diversification Opportunities for ProShares Ultra and Gotham Enhanced
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and Gotham is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Euro and Gotham Enhanced 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gotham Enhanced 500 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 Gotham Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gotham Enhanced 500 has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Gotham Enhanced go up and down completely randomly.
Pair Corralation between ProShares Ultra and Gotham Enhanced
Considering the 90-day investment horizon ProShares Ultra Euro is expected to under-perform the Gotham Enhanced. In addition to that, ProShares Ultra is 1.1 times more volatile than Gotham Enhanced 500. It trades about 0.0 of its total potential returns per unit of risk. Gotham Enhanced 500 is currently generating about 0.11 per unit of volatility. If you would invest 2,157 in Gotham Enhanced 500 on August 26, 2024 and sell it today you would earn a total of 1,110 from holding Gotham Enhanced 500 or generate 51.46% 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. Gotham Enhanced 500
Performance |
| Timeline |
| ProShares Ultra Euro |
| Gotham Enhanced 500 |
ProShares Ultra and Gotham Enhanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and Gotham Enhanced
The main advantage of trading using opposite ProShares Ultra and Gotham Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, Gotham Enhanced 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 Gotham Enhanced will offset losses from the drop in Gotham Enhanced's long position.| ProShares Ultra vs. ProShares VIX Short Term | ProShares Ultra vs. ProShares UltraShort Yen | ProShares Ultra vs. iPath Series B |
| Gotham Enhanced vs. Tidal ETF Trust | Gotham Enhanced vs. Gotham Large Value | Gotham Enhanced vs. Goldman Sachs MarketBeta | Gotham Enhanced vs. Swan Hedged Equity |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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