Correlation Between ProShares Ultra and SEI Exchange
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and SEI Exchange 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 SEI Exchange 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 SEI Exchange Traded, you can compare the effects of market volatilities on ProShares Ultra and SEI Exchange 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 SEI Exchange. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and SEI Exchange.
Diversification Opportunities for ProShares Ultra and SEI Exchange
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and SEI is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Euro and SEI Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEI Exchange Traded 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 SEI Exchange. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEI Exchange Traded has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and SEI Exchange go up and down completely randomly.
Pair Corralation between ProShares Ultra and SEI Exchange
Considering the 90-day investment horizon ProShares Ultra Euro is expected to under-perform the SEI Exchange. In addition to that, ProShares Ultra is 1.62 times more volatile than SEI Exchange Traded. It trades about -0.05 of its total potential returns per unit of risk. SEI Exchange Traded is currently generating about 0.2 per unit of volatility. If you would invest 2,689 in SEI Exchange Traded on September 1, 2024 and sell it today you would earn a total of 398.00 from holding SEI Exchange Traded or generate 14.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
ProShares Ultra Euro vs. SEI Exchange Traded
Performance |
| Timeline |
| ProShares Ultra Euro |
| SEI Exchange Traded |
ProShares Ultra and SEI Exchange Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and SEI Exchange
The main advantage of trading using opposite ProShares Ultra and SEI Exchange positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, SEI Exchange 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 SEI Exchange will offset losses from the drop in SEI Exchange'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 |
| SEI Exchange vs. SEI Exchange Traded | SEI Exchange vs. SEI Exchange Traded | SEI Exchange vs. SEI Exchange Traded | SEI Exchange vs. Listed Funds Trust |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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