Correlation Between ProShares Ultra and IShares 25
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and IShares 25 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 25 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 25 Year, you can compare the effects of market volatilities on ProShares Ultra and IShares 25 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 25. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and IShares 25.
Diversification Opportunities for ProShares Ultra and IShares 25
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between ProShares and IShares is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Semiconductors and iShares 25 Year in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares 25 Year 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 25. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares 25 Year has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and IShares 25 go up and down completely randomly.
Pair Corralation between ProShares Ultra and IShares 25
Considering the 90-day investment horizon ProShares Ultra Semiconductors is expected to generate 3.22 times more return on investment than IShares 25. However, ProShares Ultra is 3.22 times more volatile than iShares 25 Year. It trades about 0.14 of its potential returns per unit of risk. iShares 25 Year is currently generating about 0.22 per unit of risk. If you would invest 5,281 in ProShares Ultra Semiconductors on November 28, 2024 and sell it today you would earn a total of 666.00 from holding ProShares Ultra Semiconductors or generate 12.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra Semiconductors vs. iShares 25 Year
Performance |
| Timeline |
| ProShares Ultra Semi |
| iShares 25 Year |
ProShares Ultra and IShares 25 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and IShares 25
The main advantage of trading using opposite ProShares Ultra and IShares 25 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, IShares 25 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 25 will offset losses from the drop in IShares 25'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 25 vs. iShares Treasury Floating | IShares 25 vs. Schwab Long Term Treasury | IShares 25 vs. iShares iBonds Dec | IShares 25 vs. iShares iBonds Dec |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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