Correlation Between Vanguard FTSE and ProShares Trust
Can any of the company-specific risk be diversified away by investing in both Vanguard FTSE and ProShares Trust 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 FTSE and ProShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard FTSE Developed and ProShares Trust, you can compare the effects of market volatilities on Vanguard FTSE and ProShares Trust 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 FTSE with a short position of ProShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard FTSE and ProShares Trust.
Diversification Opportunities for Vanguard FTSE and ProShares Trust
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vanguard and ProShares is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard FTSE Developed and ProShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Trust and Vanguard FTSE 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 FTSE Developed are associated (or correlated) with ProShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Trust has no effect on the direction of Vanguard FTSE i.e., Vanguard FTSE and ProShares Trust go up and down completely randomly.
Pair Corralation between Vanguard FTSE and ProShares Trust
Considering the 90-day investment horizon Vanguard FTSE is expected to generate 186.92 times less return on investment than ProShares Trust. But when comparing it to its historical volatility, Vanguard FTSE Developed is 109.0 times less risky than ProShares Trust. It trades about 0.05 of its potential returns per unit of risk. ProShares Trust is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 0.00 in ProShares Trust on August 26, 2024 and sell it today you would earn a total of 2,324 from holding ProShares Trust or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 25.16% |
| Values | Daily Returns |
Vanguard FTSE Developed vs. ProShares Trust
Performance |
| Timeline |
| Vanguard FTSE Developed |
| ProShares Trust |
Vanguard FTSE and ProShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard FTSE and ProShares Trust
The main advantage of trading using opposite Vanguard FTSE and ProShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard FTSE position performs unexpectedly, ProShares Trust 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 Trust will offset losses from the drop in ProShares Trust's long position.| Vanguard FTSE vs. Dimensional Core Equity | Vanguard FTSE vs. Dimensional Emerging Core | Vanguard FTSE vs. Dimensional Targeted Value | Vanguard FTSE vs. Dimensional Small Cap |
| ProShares Trust vs. ProShares Trust | ProShares Trust vs. iShares Ethereum Trust | ProShares Trust vs. ProShares Trust | ProShares Trust vs. Grayscale Ethereum Trust |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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