Correlation Between ProShares Ultra and IShares New
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and IShares New 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 New 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 New York, you can compare the effects of market volatilities on ProShares Ultra and IShares New 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 New. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and IShares New.
Diversification Opportunities for ProShares Ultra and IShares New
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ProShares and IShares is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Semiconductors and iShares New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares New York 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 New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares New York has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and IShares New go up and down completely randomly.
Pair Corralation between ProShares Ultra and IShares New
Considering the 90-day investment horizon ProShares Ultra Semiconductors is expected to generate 18.45 times more return on investment than IShares New. However, ProShares Ultra is 18.45 times more volatile than iShares New York. It trades about 0.09 of its potential returns per unit of risk. iShares New York is currently generating about 0.07 per unit of risk. If you would invest 1,906 in ProShares Ultra Semiconductors on September 1, 2024 and sell it today you would earn a total of 4,394 from holding ProShares Ultra Semiconductors or generate 230.54% return on investment 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 New York
Performance |
| Timeline |
| ProShares Ultra Semi |
| iShares New York |
ProShares Ultra and IShares New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and IShares New
The main advantage of trading using opposite ProShares Ultra and IShares New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, IShares New 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 New will offset losses from the drop in IShares New'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 New vs. iShares California Muni | IShares New vs. iShares Intermediate GovernmentCredit | IShares New vs. Invesco New York | IShares New vs. iShares Agency Bond |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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