Correlation Between ProShares UltraShort and Pacer Cash
Can any of the company-specific risk be diversified away by investing in both ProShares UltraShort and Pacer Cash 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 Pacer Cash 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 Pacer Cash Cows, you can compare the effects of market volatilities on ProShares UltraShort and Pacer Cash 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 Pacer Cash. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraShort and Pacer Cash.
Diversification Opportunities for ProShares UltraShort and Pacer Cash
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and Pacer is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraShort Yen and Pacer Cash Cows in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Cash Cows 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 Pacer Cash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Cash Cows has no effect on the direction of ProShares UltraShort i.e., ProShares UltraShort and Pacer Cash go up and down completely randomly.
Pair Corralation between ProShares UltraShort and Pacer Cash
Considering the 90-day investment horizon ProShares UltraShort Yen is expected to under-perform the Pacer Cash. In addition to that, ProShares UltraShort is 3.24 times more volatile than Pacer Cash Cows. It trades about -0.08 of its total potential returns per unit of risk. Pacer Cash Cows is currently generating about 0.14 per unit of volatility. If you would invest 2,438 in Pacer Cash Cows on November 3, 2024 and sell it today you would earn a total of 30.00 from holding Pacer Cash Cows or generate 1.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares UltraShort Yen vs. Pacer Cash Cows
Performance |
| Timeline |
| ProShares UltraShort Yen |
| Pacer Cash Cows |
ProShares UltraShort and Pacer Cash Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares UltraShort and Pacer Cash
The main advantage of trading using opposite ProShares UltraShort and Pacer Cash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraShort position performs unexpectedly, Pacer Cash 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 Pacer Cash will offset losses from the drop in Pacer Cash'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 |
| Pacer Cash vs. First Trust SSI | Pacer Cash vs. Franklin Liberty Senior | Pacer Cash vs. SPDR Bloomberg Convertible | Pacer Cash vs. Fidelity Preferred Securities |
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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