Correlation Between ProShares Ultra and SPDR Portfolio
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and SPDR Portfolio 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 SPDR Portfolio 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 SPDR Portfolio Corporate, you can compare the effects of market volatilities on ProShares Ultra and SPDR Portfolio 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 SPDR Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and SPDR Portfolio.
Diversification Opportunities for ProShares Ultra and SPDR Portfolio
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and SPDR is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Semiconductors and SPDR Portfolio Corporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Portfolio Corporate 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 SPDR Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Portfolio Corporate has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and SPDR Portfolio go up and down completely randomly.
Pair Corralation between ProShares Ultra and SPDR Portfolio
Considering the 90-day investment horizon ProShares Ultra Semiconductors is expected to under-perform the SPDR Portfolio. In addition to that, ProShares Ultra is 16.03 times more volatile than SPDR Portfolio Corporate. It trades about 0.0 of its total potential returns per unit of risk. SPDR Portfolio Corporate is currently generating about 0.09 per unit of volatility. If you would invest 2,812 in SPDR Portfolio Corporate on September 13, 2024 and sell it today you would earn a total of 106.50 from holding SPDR Portfolio Corporate or generate 3.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra Semiconductors vs. SPDR Portfolio Corporate
Performance |
| Timeline |
| ProShares Ultra Semi |
| SPDR Portfolio Corporate |
ProShares Ultra and SPDR Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and SPDR Portfolio
The main advantage of trading using opposite ProShares Ultra and SPDR Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, SPDR Portfolio 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 SPDR Portfolio will offset losses from the drop in SPDR Portfolio's long position.| ProShares Ultra vs. ProShares Ultra SP500 | ProShares Ultra vs. Direxion Daily SP500 | ProShares Ultra vs. Direxion Daily SP | ProShares Ultra vs. Direxion Daily SP |
| SPDR Portfolio vs. American Century STOXX | SPDR Portfolio vs. Franklin Liberty Investment | SPDR Portfolio vs. Aquagold International | SPDR Portfolio vs. Morningstar Unconstrained Allocation |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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