Correlation Between Vanguard Value and ProShares
Can any of the company-specific risk be diversified away by investing in both Vanguard Value and ProShares 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 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 SP 500, you can compare the effects of market volatilities on Vanguard Value and ProShares 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. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Value and ProShares.
Diversification Opportunities for Vanguard Value and ProShares
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vanguard and ProShares is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Value Index and ProShares SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares SP 500 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. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares SP 500 has no effect on the direction of Vanguard Value i.e., Vanguard Value and ProShares go up and down completely randomly.
Pair Corralation between Vanguard Value and ProShares
Considering the 90-day investment horizon Vanguard Value Index is expected to generate 1.0 times more return on investment than ProShares. However, Vanguard Value is 1.0 times more volatile than ProShares SP 500. It trades about 0.16 of its potential returns per unit of risk. ProShares SP 500 is currently generating about 0.11 per unit of risk. If you would invest 14,098 in Vanguard Value Index on August 27, 2024 and sell it today you would earn a total of 3,910 from holding Vanguard Value Index or generate 27.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Value Index vs. ProShares SP 500
Performance |
| Timeline |
| Vanguard Value Index |
| ProShares SP 500 |
Vanguard Value and ProShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Value and ProShares
The main advantage of trading using opposite Vanguard Value and ProShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Value position performs unexpectedly, ProShares 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 will offset losses from the drop in ProShares' 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 vs. BlackRock ETF Trust | ProShares vs. Rbb Fund | ProShares vs. Virtus ETF Trust | ProShares vs. Amplify CWP Enhanced |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| CEOs Directory Screen CEOs from public companies around the world |