Correlation Between ProShares Trust and Scope AI

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

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

Diversification Opportunities for ProShares Trust and Scope AI

-0.51

Correlation Coefficient

ProShares Trust  Scope AI

Excellent diversification

The 3 months correlation between ProShares and Scope is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Trust and Scope AI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scope AI Corp and ProShares Trust 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 Trust are associated (or correlated) with Scope AI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scope AI Corp has no effect on the direction of ProShares Trust i.e., ProShares Trust and Scope AI go up and down completely randomly.

Pair Corralation between ProShares Trust and Scope AI

Given the investment horizon of 90 days ProShares Trust is expected to under-perform the Scope AI. But the etf apears to be less risky and, when comparing its historical volatility, ProShares Trust is 2.68 times less risky than Scope AI. The etf trades about -0.05 of its potential returns per unit of risk. The Scope AI Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  100.00  in Scope AI Corp on October 4, 2024 and sell it today you would earn a total of  0.00  from holding Scope AI Corp or generate 0.0% return on investment over 90 days.

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

ProShares Trust  vs.  Scope AI Corp

ProShares Trust

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares Trust are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, ProShares Trust demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Scope AI Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Scope AI Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Scope AI is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with ProShares Trust and Scope AI

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

The idea behind ProShares Trust and Scope AI Corp 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.

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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.