Correlation Between ProShares Trust and ProShares Merger
Can any of the company-specific risk be diversified away by investing in both ProShares Trust and ProShares Merger 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 ProShares Merger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Trust and ProShares Merger ETF, you can compare the effects of market volatilities on ProShares Trust and ProShares Merger 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 ProShares Merger. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Trust and ProShares Merger.
Diversification Opportunities for ProShares Trust and ProShares Merger
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between ProShares and ProShares is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Trust and ProShares Merger ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Merger ETF 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 ProShares Merger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Merger ETF has no effect on the direction of ProShares Trust i.e., ProShares Trust and ProShares Merger go up and down completely randomly.
Pair Corralation between ProShares Trust and ProShares Merger
Given the investment horizon of 90 days ProShares Trust is expected to generate 16.71 times more return on investment than ProShares Merger. However, ProShares Trust is 16.71 times more volatile than ProShares Merger ETF. It trades about 0.33 of its potential returns per unit of risk. ProShares Merger ETF is currently generating about 0.23 per unit of risk. If you would invest 2,197 in ProShares Trust on December 4, 2024 and sell it today you would earn a total of 370.00 from holding ProShares Trust or generate 16.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
ProShares Trust vs. ProShares Merger ETF
Performance |
Timeline |
ProShares Trust |
ProShares Merger ETF |
ProShares Trust and ProShares Merger Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ProShares Trust and ProShares Merger
The main advantage of trading using opposite ProShares Trust and ProShares Merger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Trust position performs unexpectedly, ProShares Merger 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 Merger will offset losses from the drop in ProShares Merger's long position.ProShares Trust vs. AXS TSLA Bear | ProShares Trust vs. Tuttle Capital Short | ProShares Trust vs. ProShares Bitcoin Strategy | ProShares Trust vs. ProShares UltraShort Bloomberg |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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