Correlation Between Vanguard ESG and ProShares Short
Can any of the company-specific risk be diversified away by investing in both Vanguard ESG and ProShares 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 Vanguard ESG and ProShares Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard ESG Corporate and ProShares Short High, you can compare the effects of market volatilities on Vanguard ESG and ProShares 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 Vanguard ESG with a short position of ProShares Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard ESG and ProShares Short.
Diversification Opportunities for Vanguard ESG and ProShares Short
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vanguard and ProShares is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard ESG Corporate and ProShares Short High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Short High and Vanguard ESG 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 ESG Corporate are associated (or correlated) with ProShares Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Short High has no effect on the direction of Vanguard ESG i.e., Vanguard ESG and ProShares Short go up and down completely randomly.
Pair Corralation between Vanguard ESG and ProShares Short
Given the investment horizon of 90 days Vanguard ESG Corporate is expected to generate 1.81 times more return on investment than ProShares Short. However, Vanguard ESG is 1.81 times more volatile than ProShares Short High. It trades about 0.2 of its potential returns per unit of risk. ProShares Short High is currently generating about -0.25 per unit of risk. If you would invest 6,252 in Vanguard ESG Corporate on September 2, 2024 and sell it today you would earn a total of 109.00 from holding Vanguard ESG Corporate or generate 1.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard ESG Corporate vs. ProShares Short High
Performance |
| Timeline |
| Vanguard ESG Corporate |
| ProShares Short High |
Vanguard ESG and ProShares Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard ESG and ProShares Short
The main advantage of trading using opposite Vanguard ESG and ProShares Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard ESG position performs unexpectedly, ProShares 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 ProShares Short will offset losses from the drop in ProShares Short's long position.| Vanguard ESG vs. Vanguard ESG International | Vanguard ESG vs. Vanguard ESG Stock | Vanguard ESG vs. Vanguard Total Corporate | Vanguard ESG vs. Vanguard Ultra Short Bond |
| ProShares Short vs. VanEck Vectors Moodys | ProShares Short vs. BondBloxx ETF Trust | ProShares Short vs. Vanguard ESG Corporate | ProShares Short vs. Vanguard Intermediate Term Corporate |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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