Correlation Between ProShares Ultra and IShares Nasdaq
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and IShares Nasdaq 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 Nasdaq 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 Nasdaq Top, you can compare the effects of market volatilities on ProShares Ultra and IShares Nasdaq 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 Nasdaq. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and IShares Nasdaq.
Diversification Opportunities for ProShares Ultra and IShares Nasdaq
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ProShares and IShares is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Semiconductors and iShares Nasdaq Top in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Nasdaq Top 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 Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Nasdaq Top has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and IShares Nasdaq go up and down completely randomly.
Pair Corralation between ProShares Ultra and IShares Nasdaq
Considering the 90-day investment horizon ProShares Ultra Semiconductors is expected to under-perform the IShares Nasdaq. In addition to that, ProShares Ultra is 4.04 times more volatile than iShares Nasdaq Top. It trades about -0.08 of its total potential returns per unit of risk. iShares Nasdaq Top is currently generating about 0.19 per unit of volatility. If you would invest 2,596 in iShares Nasdaq Top on September 12, 2024 and sell it today you would earn a total of 99.00 from holding iShares Nasdaq Top or generate 3.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra Semiconductors vs. iShares Nasdaq Top
Performance |
| Timeline |
| ProShares Ultra Semi |
| iShares Nasdaq Top |
ProShares Ultra and IShares Nasdaq Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and IShares Nasdaq
The main advantage of trading using opposite ProShares Ultra and IShares Nasdaq positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, IShares Nasdaq 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 Nasdaq will offset losses from the drop in IShares Nasdaq'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 Nasdaq vs. Freedom Day Dividend | IShares Nasdaq vs. Franklin Templeton ETF | IShares Nasdaq vs. iShares MSCI China | IShares Nasdaq 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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