Correlation Between ProShares Ultra and Pacer Swan
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and Pacer Swan 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 Pacer Swan 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 Pacer Swan SOS, you can compare the effects of market volatilities on ProShares Ultra and Pacer Swan 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 Pacer Swan. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and Pacer Swan.
Diversification Opportunities for ProShares Ultra and Pacer Swan
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ProShares and Pacer is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Semiconductors and Pacer Swan SOS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Swan SOS 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 Pacer Swan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Swan SOS has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Pacer Swan go up and down completely randomly.
Pair Corralation between ProShares Ultra and Pacer Swan
Considering the 90-day investment horizon ProShares Ultra Semiconductors is expected to under-perform the Pacer Swan. In addition to that, ProShares Ultra is 9.71 times more volatile than Pacer Swan SOS. It trades about -0.15 of its total potential returns per unit of risk. Pacer Swan SOS is currently generating about 0.16 per unit of volatility. If you would invest 2,762 in Pacer Swan SOS on August 30, 2024 and sell it today you would earn a total of 39.00 from holding Pacer Swan SOS or generate 1.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra Semiconductors vs. Pacer Swan SOS
Performance |
| Timeline |
| ProShares Ultra Semi |
| Pacer Swan SOS |
ProShares Ultra and Pacer Swan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and Pacer Swan
The main advantage of trading using opposite ProShares Ultra and Pacer Swan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, Pacer Swan 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 Pacer Swan will offset losses from the drop in Pacer Swan's long position.| ProShares Ultra vs. ABIVAX Socit Anonyme | ProShares Ultra vs. Morningstar Unconstrained Allocation | ProShares Ultra vs. SPACE | ProShares Ultra vs. Knife River |
| Pacer Swan vs. ABIVAX Socit Anonyme | Pacer Swan vs. Pinnacle Sherman Multi Strategy | Pacer Swan vs. Morningstar Unconstrained Allocation | Pacer Swan 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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