Correlation Between ProShares Ultra and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and IShares MSCI 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 MSCI 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 MSCI Europe, you can compare the effects of market volatilities on ProShares Ultra and IShares MSCI 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 MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and IShares MSCI.
Diversification Opportunities for ProShares Ultra and IShares MSCI
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ProShares and IShares is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Semiconductors and iShares MSCI Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Europe 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 MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI Europe has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and IShares MSCI go up and down completely randomly.
Pair Corralation between ProShares Ultra and IShares MSCI
Considering the 90-day investment horizon ProShares Ultra Semiconductors is expected to generate 3.05 times more return on investment than IShares MSCI. However, ProShares Ultra is 3.05 times more volatile than iShares MSCI Europe. It trades about 0.0 of its potential returns per unit of risk. iShares MSCI Europe is currently generating about -0.06 per unit of risk. If you would invest 6,380 in ProShares Ultra Semiconductors on September 2, 2024 and sell it today you would lose (80.00) from holding ProShares Ultra Semiconductors or give up 1.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra Semiconductors vs. iShares MSCI Europe
Performance |
| Timeline |
| ProShares Ultra Semi |
| iShares MSCI Europe |
ProShares Ultra and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and IShares MSCI
The main advantage of trading using opposite ProShares Ultra and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, IShares MSCI 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 MSCI will offset losses from the drop in IShares MSCI'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 MSCI vs. iShares MSCI Emerging | IShares MSCI vs. Invesco International BuyBack | IShares MSCI vs. First Trust Eurozone | IShares MSCI vs. iShares MSCI Qatar |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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