Correlation Between ProShares Ultra and IShares ESG
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and IShares ESG 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 IShares ESG 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 iShares ESG Aware, you can compare the effects of market volatilities on ProShares Ultra and IShares ESG 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 IShares ESG. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and IShares ESG.
Diversification Opportunities for ProShares Ultra and IShares ESG
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ProShares and IShares is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Semiconductors and iShares ESG Aware in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares ESG Aware 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 IShares ESG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares ESG Aware has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and IShares ESG go up and down completely randomly.
Pair Corralation between ProShares Ultra and IShares ESG
Considering the 90-day investment horizon ProShares Ultra Semiconductors is expected to generate 10.97 times more return on investment than IShares ESG. However, ProShares Ultra is 10.97 times more volatile than iShares ESG Aware. It trades about 0.03 of its potential returns per unit of risk. iShares ESG Aware is currently generating about 0.12 per unit of risk. If you would invest 6,141 in ProShares Ultra Semiconductors on September 1, 2024 and sell it today you would earn a total of 159.00 from holding ProShares Ultra Semiconductors or generate 2.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
ProShares Ultra Semiconductors vs. iShares ESG Aware
Performance |
| Timeline |
| ProShares Ultra Semi |
| iShares ESG Aware |
ProShares Ultra and IShares ESG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and IShares ESG
The main advantage of trading using opposite ProShares Ultra and IShares ESG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, IShares ESG 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 IShares ESG will offset losses from the drop in IShares ESG'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 |
| IShares ESG vs. iShares ESG Aware | IShares ESG vs. iShares ESG Aware | IShares ESG vs. iShares ESG Aware | IShares ESG vs. iShares ESG Advanced |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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