Correlation Between ProShares Ultra and IShares Russell
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and IShares Russell 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 IShares Russell 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 iShares Russell Top, you can compare the effects of market volatilities on ProShares Ultra and IShares Russell 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 IShares Russell. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and IShares Russell.
Diversification Opportunities for ProShares Ultra and IShares Russell
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and IShares is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Yen and iShares Russell Top in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Russell Top 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 IShares Russell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Russell Top has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and IShares Russell go up and down completely randomly.
Pair Corralation between ProShares Ultra and IShares Russell
Considering the 90-day investment horizon ProShares Ultra is expected to generate 2.48 times less return on investment than IShares Russell. In addition to that, ProShares Ultra is 1.76 times more volatile than iShares Russell Top. It trades about 0.03 of its total potential returns per unit of risk. iShares Russell Top is currently generating about 0.13 per unit of volatility. If you would invest 12,832 in iShares Russell Top on September 1, 2024 and sell it today you would earn a total of 1,917 from holding iShares Russell Top or generate 14.94% 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. iShares Russell Top
Performance |
| Timeline |
| ProShares Ultra Yen |
| iShares Russell Top |
ProShares Ultra and IShares Russell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and IShares Russell
The main advantage of trading using opposite ProShares Ultra and IShares Russell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, IShares Russell 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 IShares Russell will offset losses from the drop in IShares Russell's long position.| ProShares Ultra vs. ProShares VIX Mid Term | ProShares Ultra vs. iPath Series B | ProShares Ultra vs. ProShares Short Russell2000 |
| IShares Russell vs. Vanguard Total Stock | IShares Russell vs. SPDR SP 500 | IShares Russell vs. iShares Core SP | IShares Russell 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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