Correlation Between Health Care and ProShares Supply
Can any of the company-specific risk be diversified away by investing in both Health Care 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 Health Care and ProShares Supply into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Health Care Select and ProShares Supply Chain, you can compare the effects of market volatilities on Health Care 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 Health Care with a short position of ProShares Supply. Check out your portfolio center. Please also check ongoing floating volatility patterns of Health Care and ProShares Supply.
Diversification Opportunities for Health Care and ProShares Supply
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Health and ProShares is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Health Care 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 Health Care 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 Health Care 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 Health Care i.e., Health Care and ProShares Supply go up and down completely randomly.
Pair Corralation between Health Care and ProShares Supply
Considering the 90-day investment horizon Health Care is expected to generate 7.89 times less return on investment than ProShares Supply. In addition to that, Health Care is 1.18 times more volatile than ProShares Supply Chain. It trades about 0.02 of its total potential returns per unit of risk. ProShares Supply Chain is currently generating about 0.23 per unit of volatility. 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 | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Health Care Select vs. ProShares Supply Chain
Performance |
| Timeline |
| Health Care Select |
| ProShares Supply Chain |
Health Care and ProShares Supply Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Health Care and ProShares Supply
The main advantage of trading using opposite Health Care and ProShares Supply positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Health Care 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.| Health Care vs. Consumer Staples Select | Health Care vs. Industrial Select Sector | Health Care vs. Consumer Discretionary Select | Health Care vs. Utilities 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |