Correlation Between ProShares Ultra and KraneShares MSCI
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and KraneShares MSCI 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 KraneShares MSCI 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 KraneShares MSCI All, you can compare the effects of market volatilities on ProShares Ultra and KraneShares MSCI 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 KraneShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and KraneShares MSCI.
Diversification Opportunities for ProShares Ultra and KraneShares MSCI
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ProShares and KraneShares is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Yen and KraneShares MSCI All in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares MSCI All 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 KraneShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares MSCI All has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and KraneShares MSCI go up and down completely randomly.
Pair Corralation between ProShares Ultra and KraneShares MSCI
Considering the 90-day investment horizon ProShares Ultra Yen is expected to generate 0.79 times more return on investment than KraneShares MSCI. However, ProShares Ultra Yen is 1.26 times less risky than KraneShares MSCI. It trades about 0.09 of its potential returns per unit of risk. KraneShares MSCI All is currently generating about -0.1 per unit of risk. If you would invest 2,199 in ProShares Ultra Yen on September 3, 2024 and sell it today you would earn a total of 62.00 from holding ProShares Ultra Yen or generate 2.82% 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. KraneShares MSCI All
Performance |
| Timeline |
| ProShares Ultra Yen |
| KraneShares MSCI All |
ProShares Ultra and KraneShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and KraneShares MSCI
The main advantage of trading using opposite ProShares Ultra and KraneShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, KraneShares MSCI 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 KraneShares MSCI will offset losses from the drop in KraneShares MSCI'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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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