Correlation Between ProShares Ultra and Vanguard
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and Vanguard 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 Vanguard 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 Vanguard SP 500, you can compare the effects of market volatilities on ProShares Ultra and Vanguard 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 Vanguard. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and Vanguard.
Diversification Opportunities for ProShares Ultra and Vanguard
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and Vanguard is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Yen and Vanguard SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard SP 500 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 Vanguard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard SP 500 has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Vanguard go up and down completely randomly.
Pair Corralation between ProShares Ultra and Vanguard
Considering the 90-day investment horizon ProShares Ultra Yen is expected to under-perform the Vanguard. In addition to that, ProShares Ultra is 1.84 times more volatile than Vanguard SP 500. It trades about -0.06 of its total potential returns per unit of risk. Vanguard SP 500 is currently generating about 0.16 per unit of volatility. If you would invest 53,392 in Vanguard SP 500 on August 28, 2024 and sell it today you would earn a total of 1,531 from holding Vanguard SP 500 or generate 2.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra Yen vs. Vanguard SP 500
Performance |
| Timeline |
| ProShares Ultra Yen |
| Vanguard SP 500 |
ProShares Ultra and Vanguard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and Vanguard
The main advantage of trading using opposite ProShares Ultra and Vanguard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, Vanguard 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 Vanguard will offset losses from the drop in Vanguard'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 |
| Vanguard vs. Vanguard Total Stock | Vanguard vs. Vanguard High Dividend | Vanguard vs. Vanguard Information Technology | Vanguard vs. Invesco QQQ Trust |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |