Correlation Between ProShares Ultra and KraneShares Emerging
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and KraneShares Emerging 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 Emerging 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 Emerging Markets, you can compare the effects of market volatilities on ProShares Ultra and KraneShares Emerging 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 Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and KraneShares Emerging.
Diversification Opportunities for ProShares Ultra and KraneShares Emerging
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ProShares and KraneShares is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Yen and KraneShares Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares Emerging 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 Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares Emerging has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and KraneShares Emerging go up and down completely randomly.
Pair Corralation between ProShares Ultra and KraneShares Emerging
Considering the 90-day investment horizon ProShares Ultra is expected to generate 2.07 times less return on investment than KraneShares Emerging. But when comparing it to its historical volatility, ProShares Ultra Yen is 1.16 times less risky than KraneShares Emerging. It trades about 0.03 of its potential returns per unit of risk. KraneShares Emerging Markets is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,583 in KraneShares Emerging Markets on September 3, 2024 and sell it today you would earn a total of 169.00 from holding KraneShares Emerging Markets or generate 10.68% 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 Emerging Markets
Performance |
| Timeline |
| ProShares Ultra Yen |
| KraneShares Emerging |
ProShares Ultra and KraneShares Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and KraneShares Emerging
The main advantage of trading using opposite ProShares Ultra and KraneShares Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, KraneShares Emerging 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 Emerging will offset losses from the drop in KraneShares Emerging'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 |
| KraneShares Emerging vs. SCOR PK | KraneShares Emerging vs. HUMANA INC | KraneShares Emerging vs. Aquagold International | KraneShares Emerging vs. Barloworld Ltd ADR |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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