Correlation Between ProShares UltraPro and Pacer Trendpilot
Can any of the company-specific risk be diversified away by investing in both ProShares UltraPro and Pacer Trendpilot 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 Pacer Trendpilot 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 Pacer Trendpilot 100, you can compare the effects of market volatilities on ProShares UltraPro and Pacer Trendpilot 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 Pacer Trendpilot. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraPro and Pacer Trendpilot.
Diversification Opportunities for ProShares UltraPro and Pacer Trendpilot
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ProShares and Pacer is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraPro SP500 and Pacer Trendpilot 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Trendpilot 100 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 Pacer Trendpilot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Trendpilot 100 has no effect on the direction of ProShares UltraPro i.e., ProShares UltraPro and Pacer Trendpilot go up and down completely randomly.
Pair Corralation between ProShares UltraPro and Pacer Trendpilot
Given the investment horizon of 90 days ProShares UltraPro SP500 is expected to under-perform the Pacer Trendpilot. In addition to that, ProShares UltraPro is 3.6 times more volatile than Pacer Trendpilot 100. It trades about -0.04 of its total potential returns per unit of risk. Pacer Trendpilot 100 is currently generating about 0.01 per unit of volatility. If you would invest 7,450 in Pacer Trendpilot 100 on November 28, 2024 and sell it today you would earn a total of 7.00 from holding Pacer Trendpilot 100 or generate 0.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares UltraPro SP500 vs. Pacer Trendpilot 100
Performance |
| Timeline |
| ProShares UltraPro SP500 |
| Pacer Trendpilot 100 |
ProShares UltraPro and Pacer Trendpilot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares UltraPro and Pacer Trendpilot
The main advantage of trading using opposite ProShares UltraPro and Pacer Trendpilot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraPro position performs unexpectedly, Pacer Trendpilot 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 Pacer Trendpilot will offset losses from the drop in Pacer Trendpilot'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 |
| Pacer Trendpilot vs. Pacer Trendpilot Large | Pacer Trendpilot vs. Pacer Trendpilot Mid | Pacer Trendpilot vs. Pacer Trendpilot European | Pacer Trendpilot vs. Nuveen ESG Large Cap |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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