Correlation Between ProShares Trust and ASHX

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

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

Diversification Opportunities for ProShares Trust and ASHX

0.0

Correlation Coefficient

ProShares Trust  ASHX

Pay attention - limited upside

The 3 months correlation between ProShares and ASHX is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Trust and ASHX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASHX 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 ASHX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASHX has no effect on the direction of ProShares Trust i.e., ProShares Trust and ASHX go up and down completely randomly.

Pair Corralation between ProShares Trust and ASHX

If you would invest  2,275  in ProShares Trust on December 5, 2024 and sell it today you would earn a total of  267.00  from holding ProShares Trust or generate 11.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

ProShares Trust   vs.  ASHX

ProShares Trust

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares Trust are ranked lower than 6 (%) 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.

ASHX

Risk-Adjusted Performance

Very Weak

Over the last 90 days ASHX has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical indicators, ASHX is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ProShares Trust and ASHX

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

The idea behind ProShares Trust and ASHX 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.