Correlation Between Vanguard World and ProShares Trust
Can any of the company-specific risk be diversified away by investing in both Vanguard World 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 World 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 World and ProShares Trust , you can compare the effects of market volatilities on Vanguard World 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 World with a short position of ProShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard World and ProShares Trust.
Diversification Opportunities for Vanguard World and ProShares Trust
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vanguard and ProShares is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard World and ProShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Trust and Vanguard World 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 World 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 World i.e., Vanguard World and ProShares Trust go up and down completely randomly.
Pair Corralation between Vanguard World and ProShares Trust
Assuming the 90 days trading horizon Vanguard World is expected to generate 0.9 times more return on investment than ProShares Trust. However, Vanguard World is 1.11 times less risky than ProShares Trust. It trades about 0.22 of its potential returns per unit of risk. ProShares Trust is currently generating about -0.03 per unit of risk. If you would invest 227,475 in Vanguard World on September 2, 2024 and sell it today you would earn a total of 12,525 from holding Vanguard World or generate 5.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard World vs. ProShares Trust
Performance |
| Timeline |
| Vanguard World |
| ProShares Trust |
Vanguard World and ProShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard World and ProShares Trust
The main advantage of trading using opposite Vanguard World and ProShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard World 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 World vs. Promotora y Operadora | Vanguard World vs. UnitedHealth Group Incorporated | Vanguard World vs. Qulitas Controladora SAB | Vanguard World vs. Hoteles City Express |
| ProShares Trust vs. Promotora y Operadora | ProShares Trust vs. UnitedHealth Group Incorporated | ProShares Trust vs. Qulitas Controladora SAB | ProShares Trust vs. Hoteles City Express |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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