Correlation Between SPDR Series and ProShares Trust
Can any of the company-specific risk be diversified away by investing in both SPDR Series 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 SPDR Series and ProShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Series Trust and ProShares Trust , you can compare the effects of market volatilities on SPDR Series 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 SPDR Series with a short position of ProShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Series and ProShares Trust.
Diversification Opportunities for SPDR Series and ProShares Trust
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SPDR and ProShares is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Series Trust and ProShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Trust and SPDR Series 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 SPDR Series Trust 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 SPDR Series i.e., SPDR Series and ProShares Trust go up and down completely randomly.
Pair Corralation between SPDR Series and ProShares Trust
Assuming the 90 days trading horizon SPDR Series Trust is expected to generate 1.27 times more return on investment than ProShares Trust. However, SPDR Series is 1.27 times more volatile than ProShares Trust . It trades about 0.05 of its potential returns per unit of risk. ProShares Trust is currently generating about -0.03 per unit of risk. If you would invest 323,833 in SPDR Series Trust on August 31, 2024 and sell it today you would earn a total of 171,267 from holding SPDR Series Trust or generate 52.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Series Trust vs. ProShares Trust
Performance |
| Timeline |
| SPDR Series Trust |
| ProShares Trust |
SPDR Series and ProShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Series and ProShares Trust
The main advantage of trading using opposite SPDR Series and ProShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Series 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.| SPDR Series vs. SPDR Dow Jones | SPDR Series vs. SPDR Gold Trust | SPDR Series vs. SPDR SP 500 | SPDR Series vs. SPDR Series Trust |
| ProShares Trust vs. ProShares Trust | ProShares Trust vs. ProShares Trust | ProShares Trust vs. ProShares Trust | ProShares Trust vs. ProShares Trust |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |