Correlation Between ProShares Ultra and IQ MacKay
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and IQ MacKay 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 IQ MacKay 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 IQ MacKay Municipal, you can compare the effects of market volatilities on ProShares Ultra and IQ MacKay 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 IQ MacKay. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and IQ MacKay.
Diversification Opportunities for ProShares Ultra and IQ MacKay
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between ProShares and MMIN is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Semiconductors and IQ MacKay Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQ MacKay Municipal 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 IQ MacKay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IQ MacKay Municipal has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and IQ MacKay go up and down completely randomly.
Pair Corralation between ProShares Ultra and IQ MacKay
Considering the 90-day investment horizon ProShares Ultra Semiconductors is expected to generate 24.09 times more return on investment than IQ MacKay. However, ProShares Ultra is 24.09 times more volatile than IQ MacKay Municipal. It trades about 0.01 of its potential returns per unit of risk. IQ MacKay Municipal is currently generating about 0.1 per unit of risk. If you would invest 6,973 in ProShares Ultra Semiconductors on November 18, 2024 and sell it today you would lose (371.00) from holding ProShares Ultra Semiconductors or give up 5.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra Semiconductors vs. IQ MacKay Municipal
Performance |
| Timeline |
| ProShares Ultra Semi |
| IQ MacKay Municipal |
ProShares Ultra and IQ MacKay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and IQ MacKay
The main advantage of trading using opposite ProShares Ultra and IQ MacKay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, IQ MacKay 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 IQ MacKay will offset losses from the drop in IQ MacKay'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 |
| IQ MacKay vs. IQ MacKay Municipal | IQ MacKay vs. Franklin Liberty Federal | IQ MacKay vs. Columbia Multi Sector Municipal | IQ MacKay vs. Hartford Municipal Opportunities |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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