Correlation Between ProShares Ultra and JP Morgan
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and JP Morgan 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 Ultra and JP Morgan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Ultra Semiconductors and JP Morgan Exchange, you can compare the effects of market volatilities on ProShares Ultra and JP Morgan 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 Ultra with a short position of JP Morgan. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and JP Morgan.
Diversification Opportunities for ProShares Ultra and JP Morgan
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between ProShares and BBLB is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Semiconductors and JP Morgan Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JP Morgan Exchange and ProShares Ultra 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 Ultra Semiconductors are associated (or correlated) with JP Morgan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JP Morgan Exchange has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and JP Morgan go up and down completely randomly.
Pair Corralation between ProShares Ultra and JP Morgan
Considering the 90-day investment horizon ProShares Ultra Semiconductors is expected to generate 5.4 times more return on investment than JP Morgan. However, ProShares Ultra is 5.4 times more volatile than JP Morgan Exchange. It trades about 0.15 of its potential returns per unit of risk. JP Morgan Exchange is currently generating about 0.12 per unit of risk. If you would invest 5,281 in ProShares Ultra Semiconductors on November 27, 2024 and sell it today you would earn a total of 606.00 from holding ProShares Ultra Semiconductors or generate 11.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra Semiconductors vs. JP Morgan Exchange
Performance |
| Timeline |
| ProShares Ultra Semi |
| JP Morgan Exchange |
ProShares Ultra and JP Morgan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and JP Morgan
The main advantage of trading using opposite ProShares Ultra and JP Morgan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, JP Morgan 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 JP Morgan will offset losses from the drop in JP Morgan's long position.| ProShares Ultra vs. ProShares Ultra Technology | ProShares Ultra vs. ProShares Ultra Industrials | ProShares Ultra vs. ProShares Ultra Basic | ProShares Ultra vs. ProShares Ultra Health |
| JP Morgan vs. Vanguard 0 3 Month | JP Morgan vs. Global X Funds | JP Morgan vs. Vanguard Ultra Short Treasury | JP Morgan vs. US Treasury 12 |
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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