Correlation Between ProShares Ultra and ProShares High
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and ProShares High 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 ProShares High 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 ProShares High YieldInterest, you can compare the effects of market volatilities on ProShares Ultra and ProShares High 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 ProShares High. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and ProShares High.
Diversification Opportunities for ProShares Ultra and ProShares High
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and ProShares is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Euro and ProShares High YieldInterest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares High Yield 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 ProShares High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares High Yield has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and ProShares High go up and down completely randomly.
Pair Corralation between ProShares Ultra and ProShares High
Considering the 90-day investment horizon ProShares Ultra is expected to generate 2.2 times less return on investment than ProShares High. In addition to that, ProShares Ultra is 3.33 times more volatile than ProShares High YieldInterest. It trades about 0.03 of its total potential returns per unit of risk. ProShares High YieldInterest is currently generating about 0.23 per unit of volatility. If you would invest 6,535 in ProShares High YieldInterest on October 25, 2024 and sell it today you would earn a total of 99.67 from holding ProShares High YieldInterest or generate 1.53% 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. ProShares High YieldInterest
Performance |
| Timeline |
| ProShares Ultra Euro |
| ProShares High Yield |
ProShares Ultra and ProShares High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and ProShares High
The main advantage of trading using opposite ProShares Ultra and ProShares High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, ProShares High 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 ProShares High will offset losses from the drop in ProShares High'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 |
| ProShares High vs. ProShares Investment GradeInterest | ProShares High vs. iShares Interest Rate | ProShares High vs. WisdomTree Interest Rate | ProShares High vs. First Trust Tactical |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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