Correlation Between ProShares UltraPro and PGIM ETF
Can any of the company-specific risk be diversified away by investing in both ProShares UltraPro and PGIM ETF 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 PGIM ETF 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 PGIM ETF Trust, you can compare the effects of market volatilities on ProShares UltraPro and PGIM ETF 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 PGIM ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraPro and PGIM ETF.
Diversification Opportunities for ProShares UltraPro and PGIM ETF
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ProShares and PGIM is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraPro SP500 and PGIM ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PGIM ETF Trust 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 PGIM ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PGIM ETF Trust has no effect on the direction of ProShares UltraPro i.e., ProShares UltraPro and PGIM ETF go up and down completely randomly.
Pair Corralation between ProShares UltraPro and PGIM ETF
Given the investment horizon of 90 days ProShares UltraPro SP500 is expected to generate 1.52 times more return on investment than PGIM ETF. However, ProShares UltraPro is 1.52 times more volatile than PGIM ETF Trust. It trades about 0.16 of its potential returns per unit of risk. PGIM ETF Trust is currently generating about 0.12 per unit of risk. If you would invest 8,984 in ProShares UltraPro SP500 on November 9, 2024 and sell it today you would earn a total of 673.00 from holding ProShares UltraPro SP500 or generate 7.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares UltraPro SP500 vs. PGIM ETF Trust
Performance |
| Timeline |
| ProShares UltraPro SP500 |
| PGIM ETF Trust |
ProShares UltraPro and PGIM ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares UltraPro and PGIM ETF
The main advantage of trading using opposite ProShares UltraPro and PGIM ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraPro position performs unexpectedly, PGIM ETF 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 PGIM ETF will offset losses from the drop in PGIM ETF'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 |
| PGIM ETF vs. Freedom Day Dividend | PGIM ETF vs. Franklin Templeton ETF | PGIM ETF vs. iShares MSCI China | PGIM ETF vs. Tidal Trust II |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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