Correlation Between Vanguard Mid and ProShares UltraPro
Can any of the company-specific risk be diversified away by investing in both Vanguard Mid and ProShares UltraPro 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 Mid and ProShares UltraPro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Mid Cap Index and ProShares UltraPro Short, you can compare the effects of market volatilities on Vanguard Mid and ProShares UltraPro 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 Mid with a short position of ProShares UltraPro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Mid and ProShares UltraPro.
Diversification Opportunities for Vanguard Mid and ProShares UltraPro
-0.92 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vanguard and ProShares is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Mid Cap Index and ProShares UltraPro Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraPro Short and Vanguard Mid 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 Mid Cap Index are associated (or correlated) with ProShares UltraPro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares UltraPro Short has no effect on the direction of Vanguard Mid i.e., Vanguard Mid and ProShares UltraPro go up and down completely randomly.
Pair Corralation between Vanguard Mid and ProShares UltraPro
Allowing for the 90-day total investment horizon Vanguard Mid Cap Index is expected to generate 0.21 times more return on investment than ProShares UltraPro. However, Vanguard Mid Cap Index is 4.67 times less risky than ProShares UltraPro. It trades about 0.17 of its potential returns per unit of risk. ProShares UltraPro Short is currently generating about -0.06 per unit of risk. If you would invest 24,125 in Vanguard Mid Cap Index on September 3, 2024 and sell it today you would earn a total of 4,234 from holding Vanguard Mid Cap Index or generate 17.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Mid Cap Index vs. ProShares UltraPro Short
Performance |
| Timeline |
| Vanguard Mid Cap |
| ProShares UltraPro Short |
Vanguard Mid and ProShares UltraPro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Mid and ProShares UltraPro
The main advantage of trading using opposite Vanguard Mid and ProShares UltraPro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Mid position performs unexpectedly, ProShares UltraPro 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 UltraPro will offset losses from the drop in ProShares UltraPro's long position.| Vanguard Mid vs. Vanguard Small Cap Index | Vanguard Mid vs. Vanguard Large Cap Index | Vanguard Mid vs. Vanguard Small Cap Growth | Vanguard Mid vs. Vanguard Small Cap Value |
| ProShares UltraPro vs. ProShares UltraPro QQQ | ProShares UltraPro vs. ProShares UltraPro Short | ProShares UltraPro vs. ProShares UltraPro Short | ProShares UltraPro vs. ProShares Ultra VIX |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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