Correlation Between ProShares Ultra and PIMCO Short
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and PIMCO Short 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 PIMCO Short 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 PIMCO Short Term, you can compare the effects of market volatilities on ProShares Ultra and PIMCO Short 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 PIMCO Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and PIMCO Short.
Diversification Opportunities for ProShares Ultra and PIMCO Short
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ProShares and PIMCO is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Semiconductors and PIMCO Short Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Short Term 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 PIMCO Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Short Term has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and PIMCO Short go up and down completely randomly.
Pair Corralation between ProShares Ultra and PIMCO Short
Considering the 90-day investment horizon ProShares Ultra Semiconductors is expected to under-perform the PIMCO Short. In addition to that, ProShares Ultra is 23.02 times more volatile than PIMCO Short Term. It trades about -0.04 of its total potential returns per unit of risk. PIMCO Short Term is currently generating about 0.1 per unit of volatility. If you would invest 4,992 in PIMCO Short Term on August 27, 2024 and sell it today you would earn a total of 18.00 from holding PIMCO Short Term or generate 0.36% 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. PIMCO Short Term
Performance |
| Timeline |
| ProShares Ultra Semi |
| PIMCO Short Term |
ProShares Ultra and PIMCO Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and PIMCO Short
The main advantage of trading using opposite ProShares Ultra and PIMCO Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, PIMCO Short 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 PIMCO Short will offset losses from the drop in PIMCO Short's long position.| ProShares Ultra vs. ProShares Ultra Technology | ProShares Ultra vs. ProShares Ultra Basic | ProShares Ultra vs. ProShares Ultra Health |
| PIMCO Short vs. PIMCO Intermediate Municipal | PIMCO Short vs. VanEck Short Muni | PIMCO Short vs. iShares Short Term National | PIMCO Short vs. SPDR Nuveen Bloomberg |
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 CEOs Directory module to screen CEOs from public companies around the world.
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