Correlation Between ProShares Ultra and Fidelity Fundamental
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and Fidelity Fundamental 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 Fidelity Fundamental 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 Fidelity Fundamental Large, you can compare the effects of market volatilities on ProShares Ultra and Fidelity Fundamental 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 Fidelity Fundamental. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and Fidelity Fundamental.
Diversification Opportunities for ProShares Ultra and Fidelity Fundamental
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and Fidelity is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Yen and Fidelity Fundamental Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Fundamental 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 Fidelity Fundamental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Fundamental has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Fidelity Fundamental go up and down completely randomly.
Pair Corralation between ProShares Ultra and Fidelity Fundamental
Considering the 90-day investment horizon ProShares Ultra Yen is expected to under-perform the Fidelity Fundamental. In addition to that, ProShares Ultra is 1.59 times more volatile than Fidelity Fundamental Large. It trades about -0.06 of its total potential returns per unit of risk. Fidelity Fundamental Large is currently generating about 0.14 per unit of volatility. If you would invest 3,067 in Fidelity Fundamental Large on August 30, 2024 and sell it today you would earn a total of 1,668 from holding Fidelity Fundamental Large or generate 54.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra Yen vs. Fidelity Fundamental Large
Performance |
| Timeline |
| ProShares Ultra Yen |
| Fidelity Fundamental |
ProShares Ultra and Fidelity Fundamental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and Fidelity Fundamental
The main advantage of trading using opposite ProShares Ultra and Fidelity Fundamental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, Fidelity Fundamental 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 Fidelity Fundamental will offset losses from the drop in Fidelity Fundamental'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 |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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