Correlation Between ProShares Ultra and VanEck Junior

Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and VanEck Junior 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 Ultra and VanEck Junior into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ProShares Ultra Silver and VanEck Junior Gold, you can compare the effects of market volatilities on ProShares Ultra and VanEck Junior 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 Ultra with a short position of VanEck Junior. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and VanEck Junior.

Diversification Opportunities for ProShares Ultra and VanEck Junior

0.96

Correlation Coefficient

ProShares Ultra  VanEck Junior

Almost no diversification

The 3 months correlation between ProShares and VanEck is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Silver and VanEck Junior Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Junior Gold and ProShares Ultra 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 Ultra Silver are associated (or correlated) with VanEck Junior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Junior Gold has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and VanEck Junior go up and down completely randomly.

Pair Corralation between ProShares Ultra and VanEck Junior

Considering the 90-day investment horizon ProShares Ultra Silver is expected to under-perform the VanEck Junior. In addition to that, ProShares Ultra is 1.69 times more volatile than VanEck Junior Gold. It trades about -0.05 of its total potential returns per unit of risk. VanEck Junior Gold is currently generating about -0.03 per unit of volatility. If you would invest  4,658  in VanEck Junior Gold on October 6, 2024 and sell it today you would lose (233.00) from holding VanEck Junior Gold or give up 5.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

ProShares Ultra Silver  vs.  VanEck Junior Gold

ProShares Ultra Silver

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ProShares Ultra Silver has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest conflicting performance, the Etf's technical and fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the ETF retail investors.

VanEck Junior Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VanEck Junior Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady basic indicators, VanEck Junior is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

Pair Trading with ProShares Ultra and VanEck Junior

The main advantage of trading using opposite ProShares Ultra and VanEck Junior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, VanEck Junior 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 VanEck Junior will offset losses from the drop in VanEck Junior's long position.

The idea behind ProShares Ultra Silver and VanEck Junior Gold pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.