Correlation Between ProShares Ultra and IShares Short
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and IShares Short 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 IShares Short 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 iShares Short Maturity, you can compare the effects of market volatilities on ProShares Ultra and IShares Short 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 IShares Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and IShares Short.
Diversification Opportunities for ProShares Ultra and IShares Short
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and IShares is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Euro and iShares Short Maturity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Short Maturity 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 IShares Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Short Maturity has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and IShares Short go up and down completely randomly.
Pair Corralation between ProShares Ultra and IShares Short
Considering the 90-day investment horizon ProShares Ultra Euro is expected to under-perform the IShares Short. In addition to that, ProShares Ultra is 14.65 times more volatile than iShares Short Maturity. It trades about -0.26 of its total potential returns per unit of risk. iShares Short Maturity is currently generating about 0.13 per unit of volatility. If you would invest 5,003 in iShares Short Maturity on August 29, 2024 and sell it today you would earn a total of 20.50 from holding iShares Short Maturity or generate 0.41% 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. iShares Short Maturity
Performance |
| Timeline |
| ProShares Ultra Euro |
| iShares Short Maturity |
ProShares Ultra and IShares Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and IShares Short
The main advantage of trading using opposite ProShares Ultra and IShares Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, IShares Short 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 IShares Short will offset losses from the drop in IShares Short'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 |
| IShares Short vs. iShares Interest Rate | IShares Short vs. ABIVAX Socit Anonyme | IShares Short vs. HUMANA INC | IShares Short vs. SCOR PK |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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