Correlation Between ProShares Ultra and Capital Group
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and Capital Group 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 Capital Group 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 Capital Group Fixed, you can compare the effects of market volatilities on ProShares Ultra and Capital Group 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 Capital Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and Capital Group.
Diversification Opportunities for ProShares Ultra and Capital Group
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ProShares and Capital is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Semiconductors and Capital Group Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Group Fixed 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 Capital Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Group Fixed has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Capital Group go up and down completely randomly.
Pair Corralation between ProShares Ultra and Capital Group
Considering the 90-day investment horizon ProShares Ultra Semiconductors is expected to generate 11.67 times more return on investment than Capital Group. However, ProShares Ultra is 11.67 times more volatile than Capital Group Fixed. It trades about 0.09 of its potential returns per unit of risk. Capital Group Fixed is currently generating about 0.08 per unit of risk. If you would invest 1,906 in ProShares Ultra Semiconductors on September 1, 2024 and sell it today you would earn a total of 4,394 from holding ProShares Ultra Semiconductors or generate 230.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 79.57% |
| Values | Daily Returns |
ProShares Ultra Semiconductors vs. Capital Group Fixed
Performance |
| Timeline |
| ProShares Ultra Semi |
| Capital Group Fixed |
ProShares Ultra and Capital Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and Capital Group
The main advantage of trading using opposite ProShares Ultra and Capital Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, Capital Group 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 Capital Group will offset losses from the drop in Capital Group'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 |
| Capital Group vs. Valued Advisers Trust | Capital Group vs. Columbia Diversified Fixed | Capital Group vs. Principal Exchange Traded Funds | Capital Group vs. Doubleline Etf 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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