Correlation Between IShares Future and ProShares Ultra

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

By analyzing existing cross correlation between iShares Future AI and ProShares Ultra 20, you can compare the effects of market volatilities on IShares Future and ProShares Ultra 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 IShares Future with a short position of ProShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Future and ProShares Ultra.

Diversification Opportunities for IShares Future and ProShares Ultra

-0.59

Correlation Coefficient

IShares Future  ProShares Ultra

Excellent diversification

The 3 months correlation between IShares and ProShares is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding iShares Future AI and ProShares Ultra 20 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Ultra 20 and IShares Future 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 iShares Future AI are associated (or correlated) with ProShares Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Ultra 20 has no effect on the direction of IShares Future i.e., IShares Future and ProShares Ultra go up and down completely randomly.

Pair Corralation between IShares Future and ProShares Ultra

Given the investment horizon of 90 days iShares Future AI is expected to generate 0.84 times more return on investment than ProShares Ultra. However, iShares Future AI is 1.2 times less risky than ProShares Ultra. It trades about 0.16 of its potential returns per unit of risk. ProShares Ultra 20 is currently generating about -0.13 per unit of risk. If you would invest  3,326  in iShares Future AI on September 12, 2024 and sell it today you would earn a total of  478.00  from holding iShares Future AI or generate 14.37% return on investment over 90 days.

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

iShares Future AI  vs.  ProShares Ultra 20

iShares Future AI

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Future AI are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, IShares Future showed solid returns over the last few months and may actually be approaching a breakup point.

ProShares Ultra 20

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ProShares Ultra 20 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Etf's fundamental drivers remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.

Pair Trading with IShares Future and ProShares Ultra

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

The idea behind iShares Future AI and ProShares Ultra 20 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.