Correlation Between ProShares UltraPro and Simplify Asset
Can any of the company-specific risk be diversified away by investing in both ProShares UltraPro and Simplify Asset 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 UltraPro and Simplify Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares UltraPro MidCap400 and Simplify Asset Management, you can compare the effects of market volatilities on ProShares UltraPro and Simplify Asset 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 UltraPro with a short position of Simplify Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraPro and Simplify Asset.
Diversification Opportunities for ProShares UltraPro and Simplify Asset
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and Simplify is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraPro MidCap400 and Simplify Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simplify Asset Management and ProShares UltraPro 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 UltraPro MidCap400 are associated (or correlated) with Simplify Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simplify Asset Management has no effect on the direction of ProShares UltraPro i.e., ProShares UltraPro and Simplify Asset go up and down completely randomly.
Pair Corralation between ProShares UltraPro and Simplify Asset
Given the investment horizon of 90 days ProShares UltraPro MidCap400 is expected to generate 1.36 times more return on investment than Simplify Asset. However, ProShares UltraPro is 1.36 times more volatile than Simplify Asset Management. It trades about 0.07 of its potential returns per unit of risk. Simplify Asset Management is currently generating about -0.28 per unit of risk. If you would invest 1,889 in ProShares UltraPro MidCap400 on August 31, 2024 and sell it today you would earn a total of 1,523 from holding ProShares UltraPro MidCap400 or generate 80.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 8.56% |
| Values | Daily Returns |
ProShares UltraPro MidCap400 vs. Simplify Asset Management
Performance |
| Timeline |
| ProShares UltraPro |
| Simplify Asset Management |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ProShares UltraPro and Simplify Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares UltraPro and Simplify Asset
The main advantage of trading using opposite ProShares UltraPro and Simplify Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraPro position performs unexpectedly, Simplify Asset 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 Simplify Asset will offset losses from the drop in Simplify Asset's long position.The idea behind ProShares UltraPro MidCap400 and Simplify Asset Management pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |