Correlation Between ProShares Ultra and T Rowe
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and T Rowe 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 T Rowe 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 T Rowe Price, you can compare the effects of market volatilities on ProShares Ultra and T Rowe 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 T Rowe. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and T Rowe.
Diversification Opportunities for ProShares Ultra and T Rowe
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ProShares and TCAF is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Euro and T Rowe Price in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Rowe Price 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 T Rowe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Rowe Price has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and T Rowe go up and down completely randomly.
Pair Corralation between ProShares Ultra and T Rowe
Considering the 90-day investment horizon ProShares Ultra Euro is expected to under-perform the T Rowe. In addition to that, ProShares Ultra is 1.09 times more volatile than T Rowe Price. It trades about -0.04 of its total potential returns per unit of risk. T Rowe Price is currently generating about 0.13 per unit of volatility. If you would invest 2,832 in T Rowe Price on August 29, 2024 and sell it today you would earn a total of 589.00 from holding T Rowe Price or generate 20.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra Euro vs. T Rowe Price
Performance |
| Timeline |
| ProShares Ultra Euro |
| T Rowe Price |
ProShares Ultra and T Rowe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and T Rowe
The main advantage of trading using opposite ProShares Ultra and T Rowe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, T Rowe 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 T Rowe will offset losses from the drop in T Rowe'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 |
| T Rowe vs. Davis Select International | T Rowe vs. Tidal ETF Trust | T Rowe vs. Principal Value ETF | T Rowe vs. WisdomTree Emerging Markets |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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