Correlation Between DB Gold and ProShares Ultra

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

By analyzing existing cross correlation between DB Gold Short and ProShares Ultra Silver, you can compare the effects of market volatilities on DB Gold and ProShares Ultra 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 DB Gold with a short position of ProShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Gold and ProShares Ultra.

Diversification Opportunities for DB Gold and ProShares Ultra

-0.65

Correlation Coefficient

DB Gold  ProShares Ultra

Excellent diversification

The 3 months correlation between DGZ and ProShares is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding DB Gold Short and ProShares Ultra Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Ultra Silver and DB Gold 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 DB Gold Short are associated (or correlated) with ProShares Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Ultra Silver has no effect on the direction of DB Gold i.e., DB Gold and ProShares Ultra go up and down completely randomly.

Pair Corralation between DB Gold and ProShares Ultra

Considering the 90-day investment horizon DB Gold Short is expected to under-perform the ProShares Ultra. But the etf apears to be less risky and, when comparing its historical volatility, DB Gold Short is 2.36 times less risky than ProShares Ultra. The etf trades about -0.03 of its potential returns per unit of risk. The ProShares Ultra Silver is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,969  in ProShares Ultra Silver on September 21, 2024 and sell it today you would earn a total of  554.00  from holding ProShares Ultra Silver or generate 18.66% return on investment over 90 days.

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

DB Gold Short  vs.  ProShares Ultra Silver

DB Gold Short

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DB Gold Short are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, DB Gold is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

ProShares Ultra Silver

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ProShares Ultra Silver has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest conflicting performance, the Etf's technical and fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the ETF retail investors.

Pair Trading with DB Gold and ProShares Ultra

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

The idea behind DB Gold Short and ProShares Ultra Silver 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..