Correlation Between ProShares UltraShort and Vanguard
Can any of the company-specific risk be diversified away by investing in both ProShares UltraShort 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 UltraShort and Vanguard 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 Vanguard SP Small Cap, you can compare the effects of market volatilities on ProShares UltraShort 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 UltraShort with a short position of Vanguard. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraShort and Vanguard.
Diversification Opportunities for ProShares UltraShort and Vanguard
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ProShares and Vanguard is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraShort Yen and Vanguard SP Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard SP Small 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 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 Small has no effect on the direction of ProShares UltraShort i.e., ProShares UltraShort and Vanguard go up and down completely randomly.
Pair Corralation between ProShares UltraShort and Vanguard
Considering the 90-day investment horizon ProShares UltraShort Yen is expected to under-perform the Vanguard. In addition to that, ProShares UltraShort is 1.35 times more volatile than Vanguard SP Small Cap. It trades about -0.2 of its total potential returns per unit of risk. Vanguard SP Small Cap is currently generating about 0.25 per unit of volatility. If you would invest 11,656 in Vanguard SP Small Cap on November 2, 2024 and sell it today you would earn a total of 524.00 from holding Vanguard SP Small Cap or generate 4.5% 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. Vanguard SP Small Cap
Performance |
| Timeline |
| ProShares UltraShort Yen |
| Vanguard SP Small |
ProShares UltraShort and Vanguard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares UltraShort and Vanguard
The main advantage of trading using opposite ProShares UltraShort and Vanguard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraShort 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 UltraShort vs. ProShares UltraShort Euro | ProShares UltraShort vs. ProShares Ultra Yen | ProShares UltraShort vs. ProShares Ultra Euro | ProShares UltraShort vs. ProShares UltraShort MSCI |
| Vanguard vs. Vanguard SP Small Cap | Vanguard vs. Vanguard SP Mid Cap | Vanguard vs. Vanguard Russell 2000 | Vanguard vs. Vanguard SP 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Transaction History View history of all your transactions and understand their impact on performance |