Correlation Between ProShares UltraPro and ETRACS Quarterly
Can any of the company-specific risk be diversified away by investing in both ProShares UltraPro and ETRACS Quarterly 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 ETRACS Quarterly 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 ETRACS Quarterly Pay, you can compare the effects of market volatilities on ProShares UltraPro and ETRACS Quarterly 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 ETRACS Quarterly. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraPro and ETRACS Quarterly.
Diversification Opportunities for ProShares UltraPro and ETRACS Quarterly
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ProShares and ETRACS is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraPro SP500 and ETRACS Quarterly Pay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETRACS Quarterly Pay 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 ETRACS Quarterly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETRACS Quarterly Pay has no effect on the direction of ProShares UltraPro i.e., ProShares UltraPro and ETRACS Quarterly go up and down completely randomly.
Pair Corralation between ProShares UltraPro and ETRACS Quarterly
Given the investment horizon of 90 days ProShares UltraPro is expected to generate 2.07 times less return on investment than ETRACS Quarterly. In addition to that, ProShares UltraPro is 1.34 times more volatile than ETRACS Quarterly Pay. It trades about 0.14 of its total potential returns per unit of risk. ETRACS Quarterly Pay is currently generating about 0.38 per unit of volatility. If you would invest 5,523 in ETRACS Quarterly Pay on August 30, 2024 and sell it today you would earn a total of 915.00 from holding ETRACS Quarterly Pay or generate 16.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
ProShares UltraPro SP500 vs. ETRACS Quarterly Pay
Performance |
| Timeline |
| ProShares UltraPro SP500 |
| ETRACS Quarterly Pay |
ProShares UltraPro and ETRACS Quarterly Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares UltraPro and ETRACS Quarterly
The main advantage of trading using opposite ProShares UltraPro and ETRACS Quarterly positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraPro position performs unexpectedly, ETRACS Quarterly 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 ETRACS Quarterly will offset losses from the drop in ETRACS Quarterly'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 |
| ETRACS Quarterly vs. ABIVAX Socit Anonyme | ETRACS Quarterly vs. Morningstar Unconstrained Allocation | ETRACS Quarterly vs. SPACE | ETRACS Quarterly vs. Knife River |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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