Correlation Between ProShares Ultra and Xtrackers MSCI
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and Xtrackers MSCI 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 Xtrackers MSCI 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 Xtrackers MSCI USA, you can compare the effects of market volatilities on ProShares Ultra and Xtrackers MSCI 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 Xtrackers MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and Xtrackers MSCI.
Diversification Opportunities for ProShares Ultra and Xtrackers MSCI
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and Xtrackers is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Euro and Xtrackers MSCI USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers MSCI USA 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 Xtrackers MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers MSCI USA has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Xtrackers MSCI go up and down completely randomly.
Pair Corralation between ProShares Ultra and Xtrackers MSCI
Considering the 90-day investment horizon ProShares Ultra Euro is expected to under-perform the Xtrackers MSCI. In addition to that, ProShares Ultra is 1.76 times more volatile than Xtrackers MSCI USA. It trades about -0.16 of its total potential returns per unit of risk. Xtrackers MSCI USA is currently generating about 0.32 per unit of volatility. If you would invest 5,302 in Xtrackers MSCI USA on September 2, 2024 and sell it today you would earn a total of 294.00 from holding Xtrackers MSCI USA or generate 5.55% 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. Xtrackers MSCI USA
Performance |
| Timeline |
| ProShares Ultra Euro |
| Xtrackers MSCI USA |
ProShares Ultra and Xtrackers MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and Xtrackers MSCI
The main advantage of trading using opposite ProShares Ultra and Xtrackers MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, Xtrackers MSCI 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 Xtrackers MSCI will offset losses from the drop in Xtrackers MSCI'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 |
| Xtrackers MSCI vs. iShares ESG MSCI | Xtrackers MSCI vs. Xtrackers SP 500 | Xtrackers MSCI vs. iShares MSCI USA | Xtrackers MSCI vs. Vanguard ESG International |
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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