Correlation Between ProShares Ultra and SPDR FactSet
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and SPDR FactSet 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 FactSet 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 FactSet Innovative, you can compare the effects of market volatilities on ProShares Ultra and SPDR FactSet 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 FactSet. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and SPDR FactSet.
Diversification Opportunities for ProShares Ultra and SPDR FactSet
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ProShares and SPDR is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Semiconductors and SPDR FactSet Innovative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR FactSet Innovative 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 FactSet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR FactSet Innovative has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and SPDR FactSet go up and down completely randomly.
Pair Corralation between ProShares Ultra and SPDR FactSet
Considering the 90-day investment horizon ProShares Ultra Semiconductors is expected to generate 2.72 times more return on investment than SPDR FactSet. However, ProShares Ultra is 2.72 times more volatile than SPDR FactSet Innovative. It trades about 0.11 of its potential returns per unit of risk. SPDR FactSet Innovative is currently generating about 0.08 per unit of risk. If you would invest 986.00 in ProShares Ultra Semiconductors on August 26, 2024 and sell it today you would earn a total of 5,544 from holding ProShares Ultra Semiconductors or generate 562.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra Semiconductors vs. SPDR FactSet Innovative
Performance |
| Timeline |
| ProShares Ultra Semi |
| SPDR FactSet Innovative |
ProShares Ultra and SPDR FactSet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and SPDR FactSet
The main advantage of trading using opposite ProShares Ultra and SPDR FactSet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, SPDR FactSet 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 FactSet will offset losses from the drop in SPDR FactSet'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 |
| SPDR FactSet vs. SPDR SP Software | SPDR FactSet vs. SPDR Morgan Stanley | SPDR FactSet vs. SPDR SP Health |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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