Correlation Between Main International and ProShares Trust

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

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

Diversification Opportunities for Main International and ProShares Trust

-0.59

Correlation Coefficient

Main International  ProShares Trust

Excellent diversification

The 3 months correlation between Main and ProShares is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Main International ETF and ProShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Trust and Main International 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 Main International ETF are associated (or correlated) with ProShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Trust has no effect on the direction of Main International i.e., Main International and ProShares Trust go up and down completely randomly.

Pair Corralation between Main International and ProShares Trust

Given the investment horizon of 90 days Main International ETF is expected to under-perform the ProShares Trust. But the etf apears to be less risky and, when comparing its historical volatility, Main International ETF is 10.43 times less risky than ProShares Trust. The etf trades about -0.2 of its potential returns per unit of risk. The ProShares Trust is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  5,421  in ProShares Trust on October 10, 2024 and sell it today you would lose (215.00) from holding ProShares Trust or give up 3.97% of portfolio value over 90 days.

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

Main International ETF  vs.  ProShares Trust

Main International ETF

Risk-Adjusted Performance

0 of 100

Very Weak

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

ProShares Trust

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares Trust are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, ProShares Trust unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Main International and ProShares Trust

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

The idea behind Main International ETF and ProShares Trust 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.