Correlation Between ProShares Ultra and PGIM Rock
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and PGIM Rock 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 PGIM Rock 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 PGIM Rock ETF, you can compare the effects of market volatilities on ProShares Ultra and PGIM Rock 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 PGIM Rock. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and PGIM Rock.
Diversification Opportunities for ProShares Ultra and PGIM Rock
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ProShares and PGIM is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Semiconductors and PGIM Rock ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PGIM Rock ETF 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 PGIM Rock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PGIM Rock ETF has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and PGIM Rock go up and down completely randomly.
Pair Corralation between ProShares Ultra and PGIM Rock
Considering the 90-day investment horizon ProShares Ultra Semiconductors is expected to generate 13.86 times more return on investment than PGIM Rock. However, ProShares Ultra is 13.86 times more volatile than PGIM Rock ETF. It trades about 0.1 of its potential returns per unit of risk. PGIM Rock ETF is currently generating about 0.14 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 | Strong |
| Accuracy | 38.18% |
| Values | Daily Returns |
ProShares Ultra Semiconductors vs. PGIM Rock ETF
Performance |
| Timeline |
| ProShares Ultra Semi |
| PGIM Rock ETF |
ProShares Ultra and PGIM Rock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and PGIM Rock
The main advantage of trading using opposite ProShares Ultra and PGIM Rock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, PGIM Rock 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 PGIM Rock will offset losses from the drop in PGIM Rock's long position.| ProShares Ultra vs. ABIVAX Socit Anonyme | ProShares Ultra vs. Morningstar Unconstrained Allocation | ProShares Ultra vs. SPACE | ProShares Ultra vs. Knife River |
| PGIM Rock vs. ABIVAX Socit Anonyme | PGIM Rock vs. Pinnacle Sherman Multi Strategy | PGIM Rock vs. Morningstar Unconstrained Allocation | PGIM Rock vs. SPACE |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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