Correlation Between ProShares UltraPro and Invesco SP
Can any of the company-specific risk be diversified away by investing in both ProShares UltraPro and Invesco SP 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 Invesco SP 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 Invesco SP MidCap, you can compare the effects of market volatilities on ProShares UltraPro and Invesco SP 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 Invesco SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraPro and Invesco SP.
Diversification Opportunities for ProShares UltraPro and Invesco SP
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ProShares and Invesco is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraPro SP500 and Invesco SP MidCap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco SP MidCap 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 Invesco SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco SP MidCap has no effect on the direction of ProShares UltraPro i.e., ProShares UltraPro and Invesco SP go up and down completely randomly.
Pair Corralation between ProShares UltraPro and Invesco SP
Given the investment horizon of 90 days ProShares UltraPro SP500 is expected to generate 1.91 times more return on investment than Invesco SP. However, ProShares UltraPro is 1.91 times more volatile than Invesco SP MidCap. It trades about 0.13 of its potential returns per unit of risk. Invesco SP MidCap is currently generating about 0.08 per unit of risk. If you would invest 4,812 in ProShares UltraPro SP500 on August 26, 2024 and sell it today you would earn a total of 4,582 from holding ProShares UltraPro SP500 or generate 95.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares UltraPro SP500 vs. Invesco SP MidCap
Performance |
| Timeline |
| ProShares UltraPro SP500 |
| Invesco SP MidCap |
ProShares UltraPro and Invesco SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares UltraPro and Invesco SP
The main advantage of trading using opposite ProShares UltraPro and Invesco SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraPro position performs unexpectedly, Invesco SP 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 Invesco SP will offset losses from the drop in Invesco SP's long position.| ProShares UltraPro vs. Direxion Daily SP | ProShares UltraPro vs. Direxion Daily Semiconductor | ProShares UltraPro vs. Direxion Daily Semiconductor |
| Invesco SP vs. Invesco SP SmallCap | Invesco SP vs. Invesco SP MidCap | Invesco SP vs. Invesco SP SmallCap | Invesco SP vs. Invesco SP 500 |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |