Correlation Between ProShares Ultra and IShares Global
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and IShares Global 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 Global 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 Global Energy, you can compare the effects of market volatilities on ProShares Ultra and IShares Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and IShares Global.
Diversification Opportunities for ProShares Ultra and IShares Global
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ProShares and IShares is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Yen and iShares Global Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Global Energy 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Global Energy has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and IShares Global go up and down completely randomly.
Pair Corralation between ProShares Ultra and IShares Global
Considering the 90-day investment horizon ProShares Ultra Yen is expected to under-perform the IShares Global. In addition to that, ProShares Ultra is 1.94 times more volatile than iShares Global Energy. It trades about -0.17 of its total potential returns per unit of risk. iShares Global Energy is currently generating about 0.15 per unit of volatility. If you would invest 4,141 in iShares Global Energy on August 23, 2024 and sell it today you would earn a total of 117.00 from holding iShares Global Energy or generate 2.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra Yen vs. iShares Global Energy
Performance |
| Timeline |
| ProShares Ultra Yen |
| iShares Global Energy |
ProShares Ultra and IShares Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and IShares Global
The main advantage of trading using opposite ProShares Ultra and IShares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, IShares Global 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 Global will offset losses from the drop in IShares Global'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 |
| IShares Global vs. First Trust Exchange Traded | IShares Global vs. First Trust SMID | IShares Global vs. First Trust TCW | IShares Global vs. First Trust TCW |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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