Correlation Between ProShares UltraPro and Jpmorgan Active
Can any of the company-specific risk be diversified away by investing in both ProShares UltraPro and Jpmorgan Active 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 Jpmorgan Active 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 Jpmorgan Active Small, you can compare the effects of market volatilities on ProShares UltraPro and Jpmorgan Active 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 Jpmorgan Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraPro and Jpmorgan Active.
Diversification Opportunities for ProShares UltraPro and Jpmorgan Active
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ProShares and Jpmorgan is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraPro SP500 and Jpmorgan Active Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Active Small 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 Jpmorgan Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Active Small has no effect on the direction of ProShares UltraPro i.e., ProShares UltraPro and Jpmorgan Active go up and down completely randomly.
Pair Corralation between ProShares UltraPro and Jpmorgan Active
Given the investment horizon of 90 days ProShares UltraPro SP500 is expected to generate 2.32 times more return on investment than Jpmorgan Active. However, ProShares UltraPro is 2.32 times more volatile than Jpmorgan Active Small. It trades about -0.05 of its potential returns per unit of risk. Jpmorgan Active Small is currently generating about -0.2 per unit of risk. If you would invest 9,367 in ProShares UltraPro SP500 on November 27, 2024 and sell it today you would lose (206.00) from holding ProShares UltraPro SP500 or give up 2.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares UltraPro SP500 vs. Jpmorgan Active Small
Performance |
| Timeline |
| ProShares UltraPro SP500 |
| Jpmorgan Active Small |
ProShares UltraPro and Jpmorgan Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares UltraPro and Jpmorgan Active
The main advantage of trading using opposite ProShares UltraPro and Jpmorgan Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraPro position performs unexpectedly, Jpmorgan Active 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 Jpmorgan Active will offset losses from the drop in Jpmorgan Active'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 |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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