Correlation Between ProShares UltraShort and OShares Europe
Can any of the company-specific risk be diversified away by investing in both ProShares UltraShort and OShares Europe 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 OShares Europe 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 OShares Europe Quality, you can compare the effects of market volatilities on ProShares UltraShort and OShares Europe 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 OShares Europe. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraShort and OShares Europe.
Diversification Opportunities for ProShares UltraShort and OShares Europe
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and OShares is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraShort Yen and OShares Europe Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OShares Europe Quality 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 OShares Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OShares Europe Quality has no effect on the direction of ProShares UltraShort i.e., ProShares UltraShort and OShares Europe go up and down completely randomly.
Pair Corralation between ProShares UltraShort and OShares Europe
Considering the 90-day investment horizon ProShares UltraShort Yen is expected to generate 1.91 times more return on investment than OShares Europe. However, ProShares UltraShort is 1.91 times more volatile than OShares Europe Quality. It trades about 0.02 of its potential returns per unit of risk. OShares Europe Quality is currently generating about -0.33 per unit of risk. If you would invest 4,453 in ProShares UltraShort Yen on August 28, 2024 and sell it today you would earn a total of 14.00 from holding ProShares UltraShort Yen or generate 0.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares UltraShort Yen vs. OShares Europe Quality
Performance |
| Timeline |
| ProShares UltraShort Yen |
| OShares Europe Quality |
ProShares UltraShort and OShares Europe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares UltraShort and OShares Europe
The main advantage of trading using opposite ProShares UltraShort and OShares Europe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraShort position performs unexpectedly, OShares Europe 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 OShares Europe will offset losses from the drop in OShares Europe'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 |
| OShares Europe vs. WisdomTree International Hedged | OShares Europe vs. WisdomTree Emerging Markets | OShares Europe vs. WisdomTree Dynamic Currency |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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