Correlation Between ProShares Trust and Global X

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

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

Diversification Opportunities for ProShares Trust and Global X

0.79

Correlation Coefficient

ProShares Trust  Global X

Poor diversification

The 3 months correlation between ProShares and Global is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Trust and Global X Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Copper 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Copper has no effect on the direction of ProShares Trust i.e., ProShares Trust and Global X go up and down completely randomly.

Pair Corralation between ProShares Trust and Global X

Given the investment horizon of 90 days ProShares Trust is expected to under-perform the Global X. In addition to that, ProShares Trust is 2.4 times more volatile than Global X Copper. It trades about -0.18 of its total potential returns per unit of risk. Global X Copper is currently generating about 0.13 per unit of volatility. If you would invest  3,893  in Global X Copper on October 27, 2024 and sell it today you would earn a total of  101.00  from holding Global X Copper or generate 2.59% return on investment over 90 days.

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

ProShares Trust   vs.  Global X Copper

ProShares Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ProShares Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Etf's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the Etf traders.

Global X Copper

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global X Copper has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Pair Trading with ProShares Trust and Global X

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

The idea behind ProShares Trust and Global X Copper 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.