Correlation Between ProShares Ultra and Xtrackers Emerging
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and Xtrackers Emerging 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 Xtrackers Emerging 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 Xtrackers Emerging Markets, you can compare the effects of market volatilities on ProShares Ultra and Xtrackers Emerging 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 Xtrackers Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and Xtrackers Emerging.
Diversification Opportunities for ProShares Ultra and Xtrackers Emerging
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between ProShares and Xtrackers is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Yen and Xtrackers Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers Emerging 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 Xtrackers Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers Emerging has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Xtrackers Emerging go up and down completely randomly.
Pair Corralation between ProShares Ultra and Xtrackers Emerging
Considering the 90-day investment horizon ProShares Ultra Yen is expected to generate 1.73 times more return on investment than Xtrackers Emerging. However, ProShares Ultra is 1.73 times more volatile than Xtrackers Emerging Markets. It trades about 0.08 of its potential returns per unit of risk. Xtrackers Emerging Markets is currently generating about 0.05 per unit of risk. If you would invest 2,113 in ProShares Ultra Yen on September 13, 2024 and sell it today you would earn a total of 47.00 from holding ProShares Ultra Yen or generate 2.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra Yen vs. Xtrackers Emerging Markets
Performance |
| Timeline |
| ProShares Ultra Yen |
| Xtrackers Emerging |
ProShares Ultra and Xtrackers Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and Xtrackers Emerging
The main advantage of trading using opposite ProShares Ultra and Xtrackers Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, Xtrackers Emerging 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 Xtrackers Emerging will offset losses from the drop in Xtrackers Emerging'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 |
| Xtrackers Emerging vs. Global X MSCI | Xtrackers Emerging vs. Global X Alternative | Xtrackers Emerging vs. iShares Emerging Markets | Xtrackers Emerging vs. Global X SuperDividend |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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