Correlation Between ProShares UltraShort and Change Finance
Can any of the company-specific risk be diversified away by investing in both ProShares UltraShort and Change Finance 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 UltraShort and Change Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares UltraShort Yen and Change Finance Diversified, you can compare the effects of market volatilities on ProShares UltraShort and Change Finance 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 UltraShort with a short position of Change Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraShort and Change Finance.
Diversification Opportunities for ProShares UltraShort and Change Finance
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ProShares and Change is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraShort Yen and Change Finance Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Change Finance Diver and ProShares UltraShort 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 UltraShort Yen are associated (or correlated) with Change Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Change Finance Diver has no effect on the direction of ProShares UltraShort i.e., ProShares UltraShort and Change Finance go up and down completely randomly.
Pair Corralation between ProShares UltraShort and Change Finance
Considering the 90-day investment horizon ProShares UltraShort Yen is expected to under-perform the Change Finance. In addition to that, ProShares UltraShort is 1.42 times more volatile than Change Finance Diversified. It trades about -0.05 of its total potential returns per unit of risk. Change Finance Diversified is currently generating about 0.15 per unit of volatility. If you would invest 3,849 in Change Finance Diversified on October 24, 2024 and sell it today you would earn a total of 86.00 from holding Change Finance Diversified or generate 2.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
ProShares UltraShort Yen vs. Change Finance Diversified
Performance |
Timeline |
ProShares UltraShort Yen |
Change Finance Diver |
ProShares UltraShort and Change Finance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ProShares UltraShort and Change Finance
The main advantage of trading using opposite ProShares UltraShort and Change Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraShort position performs unexpectedly, Change Finance 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 Change Finance will offset losses from the drop in Change Finance's long position.ProShares UltraShort vs. ProShares UltraShort Euro | ProShares UltraShort vs. ProShares Ultra Yen | ProShares UltraShort vs. ProShares Ultra Euro | ProShares UltraShort vs. ProShares UltraShort MSCI |
Change Finance vs. Amplify ETF Trust | Change Finance vs. iShares MSCI ACWI | Change Finance vs. First Trust EIP | Change Finance vs. SPDR SP 500 |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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