Correlation Between ProShares UltraPro and Global X
Can any of the company-specific risk be diversified away by investing in both ProShares UltraPro and Global X 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 Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares UltraPro SP500 and Global X, you can compare the effects of market volatilities on ProShares UltraPro and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraPro and Global X.
Diversification Opportunities for ProShares UltraPro and Global X
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ProShares and Global is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraPro SP500 and Global X in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X 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 SP500 are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X has no effect on the direction of ProShares UltraPro i.e., ProShares UltraPro and Global X go up and down completely randomly.
Pair Corralation between ProShares UltraPro and Global X
Given the investment horizon of 90 days ProShares UltraPro SP500 is expected to generate 1.27 times more return on investment than Global X. However, ProShares UltraPro is 1.27 times more volatile than Global X. It trades about 0.11 of its potential returns per unit of risk. Global X is currently generating about 0.0 per unit of risk. If you would invest 4,248 in ProShares UltraPro SP500 on August 31, 2024 and sell it today you would earn a total of 5,457 from holding ProShares UltraPro SP500 or generate 128.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 8.82% |
| Values | Daily Returns |
ProShares UltraPro SP500 vs. Global X
Performance |
| Timeline |
| ProShares UltraPro SP500 |
| Global X |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ProShares UltraPro and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares UltraPro and Global X
The main advantage of trading using opposite ProShares UltraPro and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraPro position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| ProShares UltraPro vs. ProShares UltraPro Dow30 | ProShares UltraPro vs. ProShares UltraPro Short | ProShares UltraPro vs. ProShares UltraPro QQQ | ProShares UltraPro vs. Direxion Daily Small |
| Global X vs. Quadratic Interest Rate | Global X vs. Simplify Interest Rate | Global X vs. iShares Small Cap | Global X vs. Freedom 100 Emerging |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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