Correlation Between ProShares Ultra and FlexShares ESG
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and FlexShares ESG 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 FlexShares ESG 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 FlexShares ESG Climate, you can compare the effects of market volatilities on ProShares Ultra and FlexShares ESG 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 FlexShares ESG. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and FlexShares ESG.
Diversification Opportunities for ProShares Ultra and FlexShares ESG
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and FlexShares is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Yen and FlexShares ESG Climate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FlexShares ESG Climate 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 FlexShares ESG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FlexShares ESG Climate has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and FlexShares ESG go up and down completely randomly.
Pair Corralation between ProShares Ultra and FlexShares ESG
Considering the 90-day investment horizon ProShares Ultra is expected to generate 2.43 times less return on investment than FlexShares ESG. In addition to that, ProShares Ultra is 1.85 times more volatile than FlexShares ESG Climate. It trades about 0.03 of its total potential returns per unit of risk. FlexShares ESG Climate is currently generating about 0.13 per unit of volatility. If you would invest 5,895 in FlexShares ESG Climate on September 1, 2024 and sell it today you would earn a total of 863.00 from holding FlexShares ESG Climate or generate 14.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
ProShares Ultra Yen vs. FlexShares ESG Climate
Performance |
| Timeline |
| ProShares Ultra Yen |
| FlexShares ESG Climate |
ProShares Ultra and FlexShares ESG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and FlexShares ESG
The main advantage of trading using opposite ProShares Ultra and FlexShares ESG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, FlexShares ESG 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 FlexShares ESG will offset losses from the drop in FlexShares ESG's long position.| ProShares Ultra vs. ProShares VIX Mid Term | ProShares Ultra vs. iPath Series B | ProShares Ultra vs. ProShares Short Russell2000 |
| FlexShares ESG vs. Vanguard Total Stock | FlexShares ESG vs. SPDR SP 500 | FlexShares ESG vs. iShares Core SP | FlexShares ESG vs. Vanguard Dividend Appreciation |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |