Correlation Between ProShares Ultra and Invesco Next
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and Invesco Next 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 Invesco Next 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 Invesco Next Gen, you can compare the effects of market volatilities on ProShares Ultra and Invesco Next 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 Invesco Next. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and Invesco Next.
Diversification Opportunities for ProShares Ultra and Invesco Next
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ProShares and Invesco is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Semiconductors and Invesco Next Gen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Next Gen 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 Invesco Next. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Next Gen has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Invesco Next go up and down completely randomly.
Pair Corralation between ProShares Ultra and Invesco Next
Considering the 90-day investment horizon ProShares Ultra Semiconductors is expected to generate 4.07 times more return on investment than Invesco Next. However, ProShares Ultra is 4.07 times more volatile than Invesco Next Gen. It trades about 0.1 of its potential returns per unit of risk. Invesco Next Gen is currently generating about 0.07 per unit of risk. If you would invest 977.00 in ProShares Ultra Semiconductors on August 30, 2024 and sell it today you would earn a total of 5,100 from holding ProShares Ultra Semiconductors or generate 522.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra Semiconductors vs. Invesco Next Gen
Performance |
| Timeline |
| ProShares Ultra Semi |
| Invesco Next Gen |
ProShares Ultra and Invesco Next Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and Invesco Next
The main advantage of trading using opposite ProShares Ultra and Invesco Next positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, Invesco Next 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 Invesco Next will offset losses from the drop in Invesco Next's long position.| ProShares Ultra vs. ABIVAX Socit Anonyme | ProShares Ultra vs. Morningstar Unconstrained Allocation | ProShares Ultra vs. SPACE | ProShares Ultra vs. Knife River |
| Invesco Next vs. Freedom Day Dividend | Invesco Next vs. Franklin Templeton ETF | Invesco Next vs. iShares MSCI China | Invesco Next vs. Tidal Trust II |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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