Correlation Between ProShares Ultra and ProShares Short
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and ProShares Short 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 ProShares Ultra and ProShares Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Ultra FTSE and ProShares Short FTSE, you can compare the effects of market volatilities on ProShares Ultra and ProShares Short 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 ProShares Ultra with a short position of ProShares Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and ProShares Short.
Diversification Opportunities for ProShares Ultra and ProShares Short
-0.95 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and ProShares is -0.95. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra FTSE and ProShares Short FTSE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Short FTSE and ProShares Ultra 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 ProShares Ultra FTSE are associated (or correlated) with ProShares Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Short FTSE has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and ProShares Short go up and down completely randomly.
Pair Corralation between ProShares Ultra and ProShares Short
Considering the 90-day investment horizon ProShares Ultra FTSE is expected to generate 2.01 times more return on investment than ProShares Short. However, ProShares Ultra is 2.01 times more volatile than ProShares Short FTSE. It trades about 0.01 of its potential returns per unit of risk. ProShares Short FTSE is currently generating about -0.01 per unit of risk. If you would invest 2,032 in ProShares Ultra FTSE on August 26, 2024 and sell it today you would lose (278.00) from holding ProShares Ultra FTSE or give up 13.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra FTSE vs. ProShares Short FTSE
Performance |
| Timeline |
| ProShares Ultra FTSE |
| ProShares Short FTSE |
ProShares Ultra and ProShares Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and ProShares Short
The main advantage of trading using opposite ProShares Ultra and ProShares Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, ProShares Short 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 Short will offset losses from the drop in ProShares Short's long position.| ProShares Ultra vs. Direxion Daily SP | ProShares Ultra vs. Direxion Daily Semiconductor | ProShares Ultra vs. Direxion Daily Semiconductor |
| ProShares Short vs. ProShares Ultra FTSE | ProShares Short vs. ProShares Short MSCI | ProShares Short vs. ProShares Short MSCI | ProShares Short vs. ProShares Short Real |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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