Correlation Between ProShares Ultra and ClearBridge Dividend
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and ClearBridge Dividend 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 ClearBridge Dividend 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 ClearBridge Dividend Strategy, you can compare the effects of market volatilities on ProShares Ultra and ClearBridge Dividend 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 ClearBridge Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and ClearBridge Dividend.
Diversification Opportunities for ProShares Ultra and ClearBridge Dividend
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and ClearBridge is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Euro and ClearBridge Dividend Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ClearBridge Dividend 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 ClearBridge Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ClearBridge Dividend has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and ClearBridge Dividend go up and down completely randomly.
Pair Corralation between ProShares Ultra and ClearBridge Dividend
Considering the 90-day investment horizon ProShares Ultra Euro is expected to under-perform the ClearBridge Dividend. In addition to that, ProShares Ultra is 1.88 times more volatile than ClearBridge Dividend Strategy. It trades about -0.15 of its total potential returns per unit of risk. ClearBridge Dividend Strategy is currently generating about 0.25 per unit of volatility. If you would invest 5,105 in ClearBridge Dividend Strategy on August 30, 2024 and sell it today you would earn a total of 221.00 from holding ClearBridge Dividend Strategy or generate 4.33% 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. ClearBridge Dividend Strategy
Performance |
| Timeline |
| ProShares Ultra Euro |
| ClearBridge Dividend |
ProShares Ultra and ClearBridge Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and ClearBridge Dividend
The main advantage of trading using opposite ProShares Ultra and ClearBridge Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, ClearBridge Dividend 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 ClearBridge Dividend will offset losses from the drop in ClearBridge Dividend'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 |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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