Correlation Between ProShares Ultra and ProShares
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and ProShares 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 ProShares 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 ProShares SP Technology, you can compare the effects of market volatilities on ProShares Ultra and ProShares 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 ProShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and ProShares.
Diversification Opportunities for ProShares Ultra and ProShares
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ProShares and ProShares is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Semiconductors and ProShares SP Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares SP Technology 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 ProShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares SP Technology has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and ProShares go up and down completely randomly.
Pair Corralation between ProShares Ultra and ProShares
Considering the 90-day investment horizon ProShares Ultra Semiconductors is expected to under-perform the ProShares. In addition to that, ProShares Ultra is 3.4 times more volatile than ProShares SP Technology. It trades about -0.05 of its total potential returns per unit of risk. ProShares SP Technology is currently generating about 0.06 per unit of volatility. If you would invest 7,641 in ProShares SP Technology on August 26, 2024 and sell it today you would earn a total of 106.00 from holding ProShares SP Technology or generate 1.39% 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. ProShares SP Technology
Performance |
| Timeline |
| ProShares Ultra Semi |
| ProShares SP Technology |
ProShares Ultra and ProShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and ProShares
The main advantage of trading using opposite ProShares Ultra and ProShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, ProShares 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 ProShares will offset losses from the drop in ProShares' 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 |
| ProShares vs. Invesco DWA Utilities | ProShares vs. Invesco Dynamic Large | ProShares vs. Invesco Dynamic Large | ProShares vs. HUMANA INC |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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