Correlation Between Vanguard Small and ProShares Ultra
Can any of the company-specific risk be diversified away by investing in both Vanguard Small 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 Vanguard Small and ProShares Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Small Cap Index and ProShares Ultra MSCI, you can compare the effects of market volatilities on Vanguard Small 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 Vanguard Small with a short position of ProShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Small and ProShares Ultra.
Diversification Opportunities for Vanguard Small and ProShares Ultra
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vanguard and ProShares is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Small Cap Index and ProShares Ultra MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Ultra MSCI and Vanguard Small 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 Vanguard Small Cap Index 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 MSCI has no effect on the direction of Vanguard Small i.e., Vanguard Small and ProShares Ultra go up and down completely randomly.
Pair Corralation between Vanguard Small and ProShares Ultra
Allowing for the 90-day total investment horizon Vanguard Small Cap Index is expected to generate 0.71 times more return on investment than ProShares Ultra. However, Vanguard Small Cap Index is 1.41 times less risky than ProShares Ultra. It trades about 0.37 of its potential returns per unit of risk. ProShares Ultra MSCI is currently generating about -0.02 per unit of risk. If you would invest 23,687 in Vanguard Small Cap Index on September 4, 2024 and sell it today you would earn a total of 2,306 from holding Vanguard Small Cap Index or generate 9.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Small Cap Index vs. ProShares Ultra MSCI
Performance |
| Timeline |
| Vanguard Small Cap |
| ProShares Ultra MSCI |
Vanguard Small and ProShares Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Small and ProShares Ultra
The main advantage of trading using opposite Vanguard Small and ProShares Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Small 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.| Vanguard Small vs. Invesco DWA Emerging | Vanguard Small vs. SCOR PK | Vanguard Small vs. HUMANA INC | Vanguard Small vs. Aquagold International |
| ProShares Ultra vs. ProShares Ultra SP500 | ProShares Ultra vs. ProShares Ultra QQQ | ProShares Ultra vs. MicroSectors FANG Index | ProShares Ultra vs. ProShares Ultra Financials |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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