Correlation Between ProShares UltraPro and KraneShares
Can any of the company-specific risk be diversified away by investing in both ProShares UltraPro and KraneShares 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 KraneShares 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 KraneShares, you can compare the effects of market volatilities on ProShares UltraPro and KraneShares 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 KraneShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraPro and KraneShares.
Diversification Opportunities for ProShares UltraPro and KraneShares
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ProShares and KraneShares is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraPro SP500 and KraneShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares 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 KraneShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares has no effect on the direction of ProShares UltraPro i.e., ProShares UltraPro and KraneShares go up and down completely randomly.
Pair Corralation between ProShares UltraPro and KraneShares
Given the investment horizon of 90 days ProShares UltraPro SP500 is expected to generate 2.28 times more return on investment than KraneShares. However, ProShares UltraPro is 2.28 times more volatile than KraneShares. It trades about 0.09 of its potential returns per unit of risk. KraneShares is currently generating about -0.02 per unit of risk. If you would invest 3,735 in ProShares UltraPro SP500 on September 3, 2024 and sell it today you would earn a total of 5,970 from holding ProShares UltraPro SP500 or generate 159.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 30.91% |
| Values | Daily Returns |
ProShares UltraPro SP500 vs. KraneShares
Performance |
| Timeline |
| ProShares UltraPro SP500 |
| KraneShares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ProShares UltraPro and KraneShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares UltraPro and KraneShares
The main advantage of trading using opposite ProShares UltraPro and KraneShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraPro position performs unexpectedly, KraneShares 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 KraneShares will offset losses from the drop in KraneShares' long position.| ProShares UltraPro vs. ProShares Ultra SP500 | ProShares UltraPro vs. Direxion Daily SP500 | ProShares UltraPro vs. ProShares Ultra QQQ | ProShares UltraPro vs. Direxion Daily Technology |
| KraneShares vs. KraneShares Emerging Markets | KraneShares vs. KraneShares MSCI All | KraneShares vs. KraneShares MSCI All |
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 Stocks Directory module to find actively traded stocks across global markets.
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