Correlation Between ProShares Ultra and Franklin Income
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and Franklin Income 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 Franklin Income 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 Franklin Income Equity, you can compare the effects of market volatilities on ProShares Ultra and Franklin Income 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 Franklin Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and Franklin Income.
Diversification Opportunities for ProShares Ultra and Franklin Income
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and Franklin is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Yen and Franklin Income Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Income Equity 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 Franklin Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Income Equity has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Franklin Income go up and down completely randomly.
Pair Corralation between ProShares Ultra and Franklin Income
Considering the 90-day investment horizon ProShares Ultra is expected to generate 2.24 times less return on investment than Franklin Income. In addition to that, ProShares Ultra is 2.79 times more volatile than Franklin Income Equity. It trades about 0.03 of its total potential returns per unit of risk. Franklin Income Equity is currently generating about 0.18 per unit of volatility. If you would invest 5,190 in Franklin Income Equity on September 1, 2024 and sell it today you would earn a total of 706.00 from holding Franklin Income Equity or generate 13.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra Yen vs. Franklin Income Equity
Performance |
| Timeline |
| ProShares Ultra Yen |
| Franklin Income Equity |
ProShares Ultra and Franklin Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and Franklin Income
The main advantage of trading using opposite ProShares Ultra and Franklin Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, Franklin Income 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 Franklin Income will offset losses from the drop in Franklin Income's long position.| ProShares Ultra vs. ProShares VIX Mid Term | ProShares Ultra vs. iPath Series B | ProShares Ultra vs. ProShares Short Russell2000 |
| Franklin Income vs. Vanguard Total Stock | Franklin Income vs. SPDR SP 500 | Franklin Income vs. iShares Core SP | Franklin Income 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |