Correlation Between Vanguard Total and ProShares UltraPro
Can any of the company-specific risk be diversified away by investing in both Vanguard Total 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 Total 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 Total Stock and ProShares UltraPro Short, you can compare the effects of market volatilities on Vanguard Total 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 Total with a short position of ProShares UltraPro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and ProShares UltraPro.
Diversification Opportunities for Vanguard Total and ProShares UltraPro
-0.96 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vanguard and ProShares is -0.96. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Stock 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 Total 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 Total Stock 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 Total i.e., Vanguard Total and ProShares UltraPro go up and down completely randomly.
Pair Corralation between Vanguard Total and ProShares UltraPro
Considering the 90-day investment horizon Vanguard Total Stock is expected to generate 0.24 times more return on investment than ProShares UltraPro. However, Vanguard Total Stock is 4.09 times less risky than ProShares UltraPro. It trades about 0.12 of its potential returns per unit of risk. ProShares UltraPro Short is currently generating about -0.1 per unit of risk. If you would invest 19,410 in Vanguard Total Stock on September 3, 2024 and sell it today you would earn a total of 10,576 from holding Vanguard Total Stock or generate 54.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Total Stock vs. ProShares UltraPro Short
Performance |
| Timeline |
| Vanguard Total Stock |
| ProShares UltraPro Short |
Vanguard Total and ProShares UltraPro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and ProShares UltraPro
The main advantage of trading using opposite Vanguard Total and ProShares UltraPro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total 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 Total vs. Vanguard SP 500 | Vanguard Total vs. Vanguard Total International | Vanguard Total vs. Vanguard Real Estate | Vanguard Total vs. Vanguard Total Bond |
| 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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