Correlation Between ProShares Ultra and AIM ETF
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and AIM ETF 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 AIM ETF 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 AIM ETF Products, you can compare the effects of market volatilities on ProShares Ultra and AIM ETF 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 AIM ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and AIM ETF.
Diversification Opportunities for ProShares Ultra and AIM ETF
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ProShares and AIM is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Semiconductors and AIM ETF Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIM ETF Products 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 AIM ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIM ETF Products has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and AIM ETF go up and down completely randomly.
Pair Corralation between ProShares Ultra and AIM ETF
Considering the 90-day investment horizon ProShares Ultra Semiconductors is expected to generate 8.83 times more return on investment than AIM ETF. However, ProShares Ultra is 8.83 times more volatile than AIM ETF Products. It trades about 0.04 of its potential returns per unit of risk. AIM ETF Products is currently generating about 0.34 per unit of risk. If you would invest 6,191 in ProShares Ultra Semiconductors on September 1, 2024 and sell it today you would earn a total of 109.00 from holding ProShares Ultra Semiconductors or generate 1.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
ProShares Ultra Semiconductors vs. AIM ETF Products
Performance |
| Timeline |
| ProShares Ultra Semi |
| AIM ETF Products |
ProShares Ultra and AIM ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and AIM ETF
The main advantage of trading using opposite ProShares Ultra and AIM ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, AIM ETF 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 AIM ETF will offset losses from the drop in AIM ETF'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 |
| AIM ETF vs. Innovator ETFs Trust | AIM ETF vs. First Trust Cboe | AIM ETF vs. Innovator SP 500 | AIM ETF vs. Innovator SP 500 |
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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