Correlation Between ProShares Ultra and AllianzIM Equity
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and AllianzIM Equity 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 AllianzIM Equity 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 AllianzIM Equity Buffer15, you can compare the effects of market volatilities on ProShares Ultra and AllianzIM Equity 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 AllianzIM Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and AllianzIM Equity.
Diversification Opportunities for ProShares Ultra and AllianzIM Equity
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ProShares and AllianzIM is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Semiconductors and AllianzIM Equity Buffer15 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AllianzIM Equity Buffer15 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 AllianzIM Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AllianzIM Equity Buffer15 has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and AllianzIM Equity go up and down completely randomly.
Pair Corralation between ProShares Ultra and AllianzIM Equity
Considering the 90-day investment horizon ProShares Ultra Semiconductors is expected to under-perform the AllianzIM Equity. In addition to that, ProShares Ultra is 5.72 times more volatile than AllianzIM Equity Buffer15. It trades about -0.08 of its total potential returns per unit of risk. AllianzIM Equity Buffer15 is currently generating about 0.14 per unit of volatility. If you would invest 2,713 in AllianzIM Equity Buffer15 on August 29, 2024 and sell it today you would earn a total of 60.00 from holding AllianzIM Equity Buffer15 or generate 2.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
ProShares Ultra Semiconductors vs. AllianzIM Equity Buffer15
Performance |
| Timeline |
| ProShares Ultra Semi |
| AllianzIM Equity Buffer15 |
ProShares Ultra and AllianzIM Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and AllianzIM Equity
The main advantage of trading using opposite ProShares Ultra and AllianzIM Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, AllianzIM Equity 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 AllianzIM Equity will offset losses from the drop in AllianzIM Equity's long position.| ProShares Ultra vs. Direxion Daily SP | ProShares Ultra vs. Direxion Daily Semiconductor | ProShares Ultra vs. Direxion Daily Semiconductor |
| AllianzIM Equity vs. FT Vest Equity | AllianzIM Equity vs. Northern Lights | AllianzIM Equity vs. Dimensional International High | AllianzIM Equity vs. First Trust Exchange Traded |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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