Correlation Between VelocityShares and ProShares Ultra
Can any of the company-specific risk be diversified away by investing in both VelocityShares and ProShares Ultra 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 VelocityShares and ProShares Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VelocityShares 3x Long and ProShares Ultra Gold, you can compare the effects of market volatilities on VelocityShares and ProShares Ultra 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 VelocityShares with a short position of ProShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of VelocityShares and ProShares Ultra.
Diversification Opportunities for VelocityShares and ProShares Ultra
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between VelocityShares and ProShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding VelocityShares 3x Long and ProShares Ultra Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Ultra Gold and VelocityShares 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 VelocityShares 3x Long are associated (or correlated) with ProShares Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Ultra Gold has no effect on the direction of VelocityShares i.e., VelocityShares and ProShares Ultra go up and down completely randomly.
Pair Corralation between VelocityShares and ProShares Ultra
If you would invest 6,540 in ProShares Ultra Gold on January 24, 2025 and sell it today you would earn a total of 7,507 from holding ProShares Ultra Gold or generate 114.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
VelocityShares 3x Long vs. ProShares Ultra Gold
Performance |
| Timeline |
| VelocityShares 3x Long |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| ProShares Ultra Gold |
VelocityShares and ProShares Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VelocityShares and ProShares Ultra
The main advantage of trading using opposite VelocityShares and ProShares Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VelocityShares position performs unexpectedly, ProShares Ultra 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 Ultra will offset losses from the drop in ProShares Ultra's long position.The idea behind VelocityShares 3x Long and ProShares Ultra Gold pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| ProShares Ultra vs. ProShares UltraShort Gold | ProShares Ultra vs. ProShares Ultra Silver | ProShares Ultra vs. ProShares UltraShort Silver | ProShares Ultra vs. DB Gold Double |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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