Correlation Between ProShares Ultra and VanEck Investment
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and VanEck Investment 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 VanEck Investment 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 VanEck Investment Grade, you can compare the effects of market volatilities on ProShares Ultra and VanEck Investment 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 VanEck Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and VanEck Investment.
Diversification Opportunities for ProShares Ultra and VanEck Investment
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and VanEck is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Yen and VanEck Investment Grade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Investment Grade 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 VanEck Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Investment Grade has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and VanEck Investment go up and down completely randomly.
Pair Corralation between ProShares Ultra and VanEck Investment
Considering the 90-day investment horizon ProShares Ultra Yen is expected to under-perform the VanEck Investment. In addition to that, ProShares Ultra is 31.12 times more volatile than VanEck Investment Grade. It trades about -0.06 of its total potential returns per unit of risk. VanEck Investment Grade is currently generating about 0.53 per unit of volatility. If you would invest 2,509 in VanEck Investment Grade on September 2, 2024 and sell it today you would earn a total of 43.00 from holding VanEck Investment Grade or generate 1.71% 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. VanEck Investment Grade
Performance |
| Timeline |
| ProShares Ultra Yen |
| VanEck Investment Grade |
ProShares Ultra and VanEck Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and VanEck Investment
The main advantage of trading using opposite ProShares Ultra and VanEck Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, VanEck Investment 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 VanEck Investment will offset losses from the drop in VanEck Investment'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 |
| VanEck Investment vs. iShares Interest Rate | VanEck Investment vs. iShares Interest Rate | VanEck Investment vs. iShares Edge Investment | VanEck Investment vs. iShares Inflation Hedged |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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