Correlation Between ProShares UltraShort and Pacer Lunt
Can any of the company-specific risk be diversified away by investing in both ProShares UltraShort and Pacer Lunt 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 Lunt 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 Lunt Large, you can compare the effects of market volatilities on ProShares UltraShort and Pacer Lunt 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 Lunt. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraShort and Pacer Lunt.
Diversification Opportunities for ProShares UltraShort and Pacer Lunt
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ProShares and Pacer is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraShort Yen and Pacer Lunt Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Lunt Large 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 Lunt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Lunt Large has no effect on the direction of ProShares UltraShort i.e., ProShares UltraShort and Pacer Lunt go up and down completely randomly.
Pair Corralation between ProShares UltraShort and Pacer Lunt
Considering the 90-day investment horizon ProShares UltraShort Yen is expected to under-perform the Pacer Lunt. In addition to that, ProShares UltraShort is 1.27 times more volatile than Pacer Lunt Large. It trades about -0.02 of its total potential returns per unit of risk. Pacer Lunt Large is currently generating about 0.14 per unit of volatility. If you would invest 4,947 in Pacer Lunt Large on October 23, 2024 and sell it today you would earn a total of 119.15 from holding Pacer Lunt Large or generate 2.41% 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. Pacer Lunt Large
Performance |
| Timeline |
| ProShares UltraShort Yen |
| Pacer Lunt Large |
ProShares UltraShort and Pacer Lunt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares UltraShort and Pacer Lunt
The main advantage of trading using opposite ProShares UltraShort and Pacer Lunt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraShort position performs unexpectedly, Pacer Lunt 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 Lunt will offset losses from the drop in Pacer Lunt'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 Lunt vs. Pacer Lunt Large | Pacer Lunt vs. Pacer Lunt MidCap | Pacer Lunt vs. Pacer Trendpilot Bond | Pacer Lunt vs. Pacer Small Cap |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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