Correlation Between ProShares Ultra and Pacer Pacific
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and Pacer Pacific 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 Pacer Pacific 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 Pacer Pacific Asset, you can compare the effects of market volatilities on ProShares Ultra and Pacer Pacific 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 Pacer Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and Pacer Pacific.
Diversification Opportunities for ProShares Ultra and Pacer Pacific
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ProShares and Pacer is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Semiconductors and Pacer Pacific Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Pacific Asset 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 Pacer Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Pacific Asset has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Pacer Pacific go up and down completely randomly.
Pair Corralation between ProShares Ultra and Pacer Pacific
Considering the 90-day investment horizon ProShares Ultra Semiconductors is expected to generate 43.31 times more return on investment than Pacer Pacific. However, ProShares Ultra is 43.31 times more volatile than Pacer Pacific Asset. It trades about 0.11 of its potential returns per unit of risk. Pacer Pacific Asset is currently generating about 0.41 per unit of risk. If you would invest 935.00 in ProShares Ultra Semiconductors on August 27, 2024 and sell it today you would earn a total of 5,595 from holding ProShares Ultra Semiconductors or generate 598.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra Semiconductors vs. Pacer Pacific Asset
Performance |
| Timeline |
| ProShares Ultra Semi |
| Pacer Pacific Asset |
ProShares Ultra and Pacer Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and Pacer Pacific
The main advantage of trading using opposite ProShares Ultra and Pacer Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, Pacer Pacific 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 Pacer Pacific will offset losses from the drop in Pacer Pacific'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 |
| Pacer Pacific vs. Franklin Liberty Short | Pacer Pacific vs. SPDR Bloomberg Investment | Pacer Pacific vs. VanEck Investment Grade |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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