Correlation Between ProShares Ultra and WisdomTree
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and WisdomTree 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 WisdomTree 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 WisdomTree 7 10 Year, you can compare the effects of market volatilities on ProShares Ultra and WisdomTree 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 WisdomTree. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and WisdomTree.
Diversification Opportunities for ProShares Ultra and WisdomTree
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and WisdomTree is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Semiconductors and WisdomTree 7 10 Year in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree 7 10 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 WisdomTree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree 7 10 has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and WisdomTree go up and down completely randomly.
Pair Corralation between ProShares Ultra and WisdomTree
Considering the 90-day investment horizon ProShares Ultra Semiconductors is expected to generate 10.79 times more return on investment than WisdomTree. However, ProShares Ultra is 10.79 times more volatile than WisdomTree 7 10 Year. It trades about 0.1 of its potential returns per unit of risk. WisdomTree 7 10 Year is currently generating about 0.05 per unit of risk. If you would invest 1,211 in ProShares Ultra Semiconductors on September 1, 2024 and sell it today you would earn a total of 5,089 from holding ProShares Ultra Semiconductors or generate 420.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 40.0% |
| Values | Daily Returns |
ProShares Ultra Semiconductors vs. WisdomTree 7 10 Year
Performance |
| Timeline |
| ProShares Ultra Semi |
| WisdomTree 7 10 |
ProShares Ultra and WisdomTree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and WisdomTree
The main advantage of trading using opposite ProShares Ultra and WisdomTree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, WisdomTree 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 WisdomTree will offset losses from the drop in WisdomTree'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 |
| WisdomTree vs. SPDR Barclays Short | WisdomTree vs. SPDR Portfolio Intermediate | WisdomTree vs. SPDR Barclays Long | WisdomTree vs. SPDR Barclays Intermediate |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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