Correlation Between ProShares Ultra and Quadratic Deflation
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and Quadratic Deflation 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 Quadratic Deflation 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 Quadratic Deflation ETF, you can compare the effects of market volatilities on ProShares Ultra and Quadratic Deflation 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 Quadratic Deflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and Quadratic Deflation.
Diversification Opportunities for ProShares Ultra and Quadratic Deflation
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and Quadratic is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Semiconductors and Quadratic Deflation ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quadratic Deflation ETF 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 Quadratic Deflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quadratic Deflation ETF has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Quadratic Deflation go up and down completely randomly.
Pair Corralation between ProShares Ultra and Quadratic Deflation
Considering the 90-day investment horizon ProShares Ultra Semiconductors is expected to generate 6.98 times more return on investment than Quadratic Deflation. However, ProShares Ultra is 6.98 times more volatile than Quadratic Deflation ETF. It trades about 0.05 of its potential returns per unit of risk. Quadratic Deflation ETF is currently generating about -0.02 per unit of risk. If you would invest 4,808 in ProShares Ultra Semiconductors on September 1, 2024 and sell it today you would earn a total of 1,492 from holding ProShares Ultra Semiconductors or generate 31.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra Semiconductors vs. Quadratic Deflation ETF
Performance |
| Timeline |
| ProShares Ultra Semi |
| Quadratic Deflation ETF |
ProShares Ultra and Quadratic Deflation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and Quadratic Deflation
The main advantage of trading using opposite ProShares Ultra and Quadratic Deflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, Quadratic Deflation 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 Quadratic Deflation will offset losses from the drop in Quadratic Deflation'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 |
| Quadratic Deflation vs. SPDR Barclays Short | Quadratic Deflation vs. SPDR Portfolio Intermediate | Quadratic Deflation vs. SPDR Barclays Long | Quadratic Deflation vs. SPDR Barclays Intermediate |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |