Correlation Between ProShares Ultra and Vanguard Short
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and Vanguard 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 Vanguard 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 Vanguard Short Term Tax Exempt, you can compare the effects of market volatilities on ProShares Ultra and Vanguard 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 Vanguard Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and Vanguard Short.
Diversification Opportunities for ProShares Ultra and Vanguard Short
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ProShares and Vanguard is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Semiconductors and Vanguard Short Term Tax Exempt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard 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 Vanguard Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Short Term has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Vanguard Short go up and down completely randomly.
Pair Corralation between ProShares Ultra and Vanguard Short
Considering the 90-day investment horizon ProShares Ultra Semiconductors is expected to under-perform the Vanguard Short. In addition to that, ProShares Ultra is 28.17 times more volatile than Vanguard Short Term Tax Exempt. It trades about -0.03 of its total potential returns per unit of risk. Vanguard Short Term Tax Exempt is currently generating about 0.13 per unit of volatility. If you would invest 10,038 in Vanguard Short Term Tax Exempt on August 25, 2024 and sell it today you would earn a total of 42.00 from holding Vanguard Short Term Tax Exempt or generate 0.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra Semiconductors vs. Vanguard Short Term Tax Exempt
Performance |
| Timeline |
| ProShares Ultra Semi |
| Vanguard Short Term |
ProShares Ultra and Vanguard Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and Vanguard Short
The main advantage of trading using opposite ProShares Ultra and Vanguard Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, Vanguard 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 Vanguard Short will offset losses from the drop in Vanguard Short'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 |
| Vanguard Short vs. Vanguard Tax Exempt Bond | Vanguard Short vs. Vanguard Ultra Short Bond | Vanguard Short vs. Schwab Municipal Bond | Vanguard Short vs. Vanguard Tax Exempt Bond |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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