Correlation Between ProShares Ultra and Ocean Park
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and Ocean Park 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 Ocean Park into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Ultra Yen and Ocean Park High, you can compare the effects of market volatilities on ProShares Ultra and Ocean Park 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 Ocean Park. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and Ocean Park.
Diversification Opportunities for ProShares Ultra and Ocean Park
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ProShares and Ocean is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Yen and Ocean Park High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocean Park High 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 Yen are associated (or correlated) with Ocean Park. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocean Park High has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Ocean Park go up and down completely randomly.
Pair Corralation between ProShares Ultra and Ocean Park
Considering the 90-day investment horizon ProShares Ultra Yen is expected to generate 6.03 times more return on investment than Ocean Park. However, ProShares Ultra is 6.03 times more volatile than Ocean Park High. It trades about 0.15 of its potential returns per unit of risk. Ocean Park High is currently generating about 0.12 per unit of risk. If you would invest 2,055 in ProShares Ultra Yen on November 18, 2024 and sell it today you would earn a total of 84.00 from holding ProShares Ultra Yen or generate 4.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra Yen vs. Ocean Park High
Performance |
| Timeline |
| ProShares Ultra Yen |
| Ocean Park High |
ProShares Ultra and Ocean Park Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and Ocean Park
The main advantage of trading using opposite ProShares Ultra and Ocean Park positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, Ocean Park 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 Ocean Park will offset losses from the drop in Ocean Park's long position.| ProShares Ultra vs. ProShares Ultra Euro | ProShares Ultra vs. ProShares UltraShort Yen | ProShares Ultra vs. ProShares Ultra Telecommunications | ProShares Ultra vs. ProShares Ultra Consumer |
| Ocean Park vs. iShares iBoxx High | Ocean Park vs. iShares Broad USD | Ocean Park vs. SPDR Bloomberg High | Ocean Park vs. iShares 0 5 Year |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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