Correlation Between ProShares UltraPro and SPDR BOFA
Can any of the company-specific risk be diversified away by investing in both ProShares UltraPro and SPDR BOFA 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 SPDR BOFA 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 SPDR BOFA MERRILL, you can compare the effects of market volatilities on ProShares UltraPro and SPDR BOFA 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 SPDR BOFA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraPro and SPDR BOFA.
Diversification Opportunities for ProShares UltraPro and SPDR BOFA
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ProShares and SPDR is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraPro SP500 and SPDR BOFA MERRILL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR BOFA MERRILL 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 SPDR BOFA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR BOFA MERRILL has no effect on the direction of ProShares UltraPro i.e., ProShares UltraPro and SPDR BOFA go up and down completely randomly.
Pair Corralation between ProShares UltraPro and SPDR BOFA
Given the investment horizon of 90 days ProShares UltraPro SP500 is expected to generate 1.59 times more return on investment than SPDR BOFA. However, ProShares UltraPro is 1.59 times more volatile than SPDR BOFA MERRILL. It trades about 0.13 of its potential returns per unit of risk. SPDR BOFA MERRILL is currently generating about 0.19 per unit of risk. If you would invest 9,310 in ProShares UltraPro SP500 on November 18, 2024 and sell it today you would earn a total of 471.00 from holding ProShares UltraPro SP500 or generate 5.06% 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. SPDR BOFA MERRILL
Performance |
| Timeline |
| ProShares UltraPro SP500 |
| SPDR BOFA MERRILL |
ProShares UltraPro and SPDR BOFA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares UltraPro and SPDR BOFA
The main advantage of trading using opposite ProShares UltraPro and SPDR BOFA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraPro position performs unexpectedly, SPDR BOFA 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 SPDR BOFA will offset losses from the drop in SPDR BOFA'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 |
| SPDR BOFA vs. Cambria Micro And | SPDR BOFA vs. Invesco Actively Managed | SPDR BOFA vs. Harbor ETF Trust | SPDR BOFA vs. iShares Trust |
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.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |