Correlation Between ProShares Ultra and Global X
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and Global X 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 Global X 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 Global X SP, you can compare the effects of market volatilities on ProShares Ultra and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and Global X.
Diversification Opportunities for ProShares Ultra and Global X
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ProShares and Global is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Semiconductors and Global X SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X SP 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X SP has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Global X go up and down completely randomly.
Pair Corralation between ProShares Ultra and Global X
Considering the 90-day investment horizon ProShares Ultra is expected to generate 1.55 times less return on investment than Global X. In addition to that, ProShares Ultra is 4.5 times more volatile than Global X SP. It trades about 0.03 of its total potential returns per unit of risk. Global X SP is currently generating about 0.19 per unit of volatility. If you would invest 6,970 in Global X SP on August 24, 2024 and sell it today you would earn a total of 265.00 from holding Global X SP or generate 3.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra Semiconductors vs. Global X SP
Performance |
| Timeline |
| ProShares Ultra Semi |
| Global X SP |
ProShares Ultra and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and Global X
The main advantage of trading using opposite ProShares Ultra and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X'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 |
| Global X vs. Global X Conscious | Global X vs. Global X MSCI | Global X vs. Global X Alternative | Global X vs. VictoryShares 500 Enhanced |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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