Correlation Between SonicShares Global and ProShares Supply

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

By analyzing existing cross correlation between SonicShares Global Shipping and ProShares Supply Chain, you can compare the effects of market volatilities on SonicShares Global and ProShares Supply 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 SonicShares Global with a short position of ProShares Supply. Check out your portfolio center. Please also check ongoing floating volatility patterns of SonicShares Global and ProShares Supply.

Diversification Opportunities for SonicShares Global and ProShares Supply

0.13

Correlation Coefficient

SonicShares Global  ProShares Supply

Average diversification

The 3 months correlation between SonicShares and ProShares is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding SonicShares Global Shipping and ProShares Supply Chain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Supply Chain and SonicShares Global 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 SonicShares Global Shipping are associated (or correlated) with ProShares Supply. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Supply Chain has no effect on the direction of SonicShares Global i.e., SonicShares Global and ProShares Supply go up and down completely randomly.

Pair Corralation between SonicShares Global and ProShares Supply

Given the investment horizon of 90 days SonicShares Global Shipping is expected to generate 1.06 times more return on investment than ProShares Supply. However, SonicShares Global is 1.06 times more volatile than ProShares Supply Chain. It trades about -0.04 of its potential returns per unit of risk. ProShares Supply Chain is currently generating about -0.05 per unit of risk. If you would invest  2,735  in SonicShares Global Shipping on December 29, 2024 and sell it today you would lose (74.00) from holding SonicShares Global Shipping or give up 2.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

SonicShares Global Shipping  vs.  ProShares Supply Chain

SonicShares Global

Risk-Adjusted Performance

Very Weak

Over the last 90 days SonicShares Global Shipping has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, SonicShares Global is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

ProShares Supply Chain

Risk-Adjusted Performance

Very Weak

Over the last 90 days ProShares Supply Chain has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, ProShares Supply is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with SonicShares Global and ProShares Supply

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

The idea behind SonicShares Global Shipping and ProShares Supply Chain 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.