Correlation Between ProShares Ultra and Vanguard Russell
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and Vanguard Russell 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 Vanguard Russell 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 Vanguard Russell 3000, you can compare the effects of market volatilities on ProShares Ultra and Vanguard Russell 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 Vanguard Russell. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and Vanguard Russell.
Diversification Opportunities for ProShares Ultra and Vanguard Russell
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and Vanguard is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Euro and Vanguard Russell 3000 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Russell 3000 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 Vanguard Russell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Russell 3000 has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Vanguard Russell go up and down completely randomly.
Pair Corralation between ProShares Ultra and Vanguard Russell
Considering the 90-day investment horizon ProShares Ultra Euro is expected to under-perform the Vanguard Russell. But the etf apears to be less risky and, when comparing its historical volatility, ProShares Ultra Euro is 1.01 times less risky than Vanguard Russell. The etf trades about -0.04 of its potential returns per unit of risk. The Vanguard Russell 3000 is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 41,729 in Vanguard Russell 3000 on August 29, 2024 and sell it today you would earn a total of 10,207 from holding Vanguard Russell 3000 or generate 24.46% 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. Vanguard Russell 3000
Performance |
| Timeline |
| ProShares Ultra Euro |
| Vanguard Russell 3000 |
ProShares Ultra and Vanguard Russell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and Vanguard Russell
The main advantage of trading using opposite ProShares Ultra and Vanguard Russell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, Vanguard Russell 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 Vanguard Russell will offset losses from the drop in Vanguard Russell'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 |
| Vanguard Russell vs. JPMorgan BetaBuilders International | Vanguard Russell vs. JPMorgan Core Plus | Vanguard Russell vs. JPMorgan BetaBuilders Canada | Vanguard Russell vs. JPMorgan 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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