Correlation Between Vanguard Value and ProShares Trust
Can any of the company-specific risk be diversified away by investing in both Vanguard Value 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 Value 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 Value Index and ProShares Trust, you can compare the effects of market volatilities on Vanguard Value 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 Value with a short position of ProShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Value and ProShares Trust.
Diversification Opportunities for Vanguard Value and ProShares Trust
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vanguard and ProShares is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Value Index and ProShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Trust and Vanguard Value 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 Value Index 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 Value i.e., Vanguard Value and ProShares Trust go up and down completely randomly.
Pair Corralation between Vanguard Value and ProShares Trust
Considering the 90-day investment horizon Vanguard Value is expected to generate 100.2 times less return on investment than ProShares Trust. But when comparing it to its historical volatility, Vanguard Value Index is 140.45 times less risky than ProShares Trust. It trades about 0.12 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 30, 2024 and sell it today you would earn a total of 2,108 from holding ProShares Trust or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 30.96% |
| Values | Daily Returns |
Vanguard Value Index vs. ProShares Trust
Performance |
| Timeline |
| Vanguard Value Index |
| ProShares Trust |
Vanguard Value and ProShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Value and ProShares Trust
The main advantage of trading using opposite Vanguard Value and ProShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Value 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 Value vs. Vanguard Growth Index | Vanguard Value vs. Vanguard Small Cap Value | Vanguard Value vs. Vanguard Mid Cap Value | Vanguard Value vs. Vanguard Small Cap Index |
| ProShares Trust vs. Vanguard Total Stock | ProShares Trust vs. SPDR SP 500 | ProShares Trust vs. iShares Core SP | ProShares Trust vs. Vanguard Total Bond |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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