Correlation Between ProShares Ultra and Schwab Fundamental
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and Schwab Fundamental 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 Schwab Fundamental 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 Schwab Fundamental Large, you can compare the effects of market volatilities on ProShares Ultra and Schwab Fundamental 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 Schwab Fundamental. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and Schwab Fundamental.
Diversification Opportunities for ProShares Ultra and Schwab Fundamental
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ProShares and Schwab is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Semiconductors and Schwab Fundamental Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schwab Fundamental Large 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 Schwab Fundamental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schwab Fundamental Large has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Schwab Fundamental go up and down completely randomly.
Pair Corralation between ProShares Ultra and Schwab Fundamental
Considering the 90-day investment horizon ProShares Ultra Semiconductors is expected to under-perform the Schwab Fundamental. In addition to that, ProShares Ultra is 4.73 times more volatile than Schwab Fundamental Large. It trades about -0.04 of its total potential returns per unit of risk. Schwab Fundamental Large is currently generating about 0.2 per unit of volatility. If you would invest 2,398 in Schwab Fundamental Large on August 27, 2024 and sell it today you would earn a total of 85.00 from holding Schwab Fundamental Large or generate 3.54% 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. Schwab Fundamental Large
Performance |
| Timeline |
| ProShares Ultra Semi |
| Schwab Fundamental Large |
ProShares Ultra and Schwab Fundamental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and Schwab Fundamental
The main advantage of trading using opposite ProShares Ultra and Schwab Fundamental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, Schwab Fundamental 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 Schwab Fundamental will offset losses from the drop in Schwab Fundamental'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 |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |