Correlation Between Consumer Staples and ProShares Supply
Can any of the company-specific risk be diversified away by investing in both Consumer Staples and ProShares Supply 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 Consumer Staples and ProShares Supply into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Consumer Staples Select and ProShares Supply Chain, you can compare the effects of market volatilities on Consumer Staples and ProShares Supply 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 Consumer Staples with a short position of ProShares Supply. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consumer Staples and ProShares Supply.
Diversification Opportunities for Consumer Staples and ProShares Supply
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Consumer and ProShares is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Consumer Staples Select and ProShares Supply Chain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Supply Chain and Consumer Staples 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 Consumer Staples Select are associated (or correlated) with ProShares Supply. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Supply Chain has no effect on the direction of Consumer Staples i.e., Consumer Staples and ProShares Supply go up and down completely randomly.
Pair Corralation between Consumer Staples and ProShares Supply
Considering the 90-day investment horizon Consumer Staples is expected to generate 1.04 times less return on investment than ProShares Supply. But when comparing it to its historical volatility, Consumer Staples Select is 1.09 times less risky than ProShares Supply. It trades about 0.24 of its potential returns per unit of risk. ProShares Supply Chain is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 4,045 in ProShares Supply Chain on September 1, 2024 and sell it today you would earn a total of 147.00 from holding ProShares Supply Chain or generate 3.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Consumer Staples Select vs. ProShares Supply Chain
Performance |
| Timeline |
| Consumer Staples Select |
| ProShares Supply Chain |
Consumer Staples and ProShares Supply Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Consumer Staples and ProShares Supply
The main advantage of trading using opposite Consumer Staples and ProShares Supply positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consumer Staples position performs unexpectedly, ProShares Supply 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 Supply will offset losses from the drop in ProShares Supply's long position.| Consumer Staples vs. Consumer Discretionary Select | Consumer Staples vs. Industrial Select Sector | Consumer Staples vs. Utilities Select Sector | Consumer Staples vs. Materials Select Sector |
| ProShares Supply vs. Industrial Select Sector | ProShares Supply vs. Driven Brands Holdings | ProShares Supply vs. iShares Industrials ETF | ProShares Supply vs. iShares Transportation Average |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |