Correlation Between GraniteShares 15x and ProShares UltraShort

Can any of the company-specific risk be diversified away by investing in both GraniteShares 15x and ProShares UltraShort 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 GraniteShares 15x and ProShares UltraShort into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GraniteShares 15x Long and ProShares UltraShort SP500, you can compare the effects of market volatilities on GraniteShares 15x and ProShares UltraShort 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 GraniteShares 15x with a short position of ProShares UltraShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares 15x and ProShares UltraShort.

Diversification Opportunities for GraniteShares 15x and ProShares UltraShort

-0.1

Correlation Coefficient

GraniteShares 15x  ProShares UltraShort

Good diversification

The 3 months correlation between GraniteShares and ProShares is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares 15x Long and ProShares UltraShort SP500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort and GraniteShares 15x 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 GraniteShares 15x Long are associated (or correlated) with ProShares UltraShort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares UltraShort has no effect on the direction of GraniteShares 15x i.e., GraniteShares 15x and ProShares UltraShort go up and down completely randomly.

Pair Corralation between GraniteShares 15x and ProShares UltraShort

Given the investment horizon of 90 days GraniteShares 15x Long is expected to generate 4.85 times more return on investment than ProShares UltraShort. However, GraniteShares 15x is 4.85 times more volatile than ProShares UltraShort SP500. It trades about 0.1 of its potential returns per unit of risk. ProShares UltraShort SP500 is currently generating about 0.09 per unit of risk. If you would invest  4,841  in GraniteShares 15x Long on November 28, 2024 and sell it today you would earn a total of  509.00  from holding GraniteShares 15x Long or generate 10.51% return on investment over 90 days.

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

GraniteShares 15x Long  vs.  ProShares UltraShort SP500

GraniteShares 15x Long

Risk-Adjusted Performance

Very Weak

Over the last 90 days GraniteShares 15x Long has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Etf's fundamental indicators remain quite persistent which may send shares a bit higher in March 2025. The latest mess may also be a sign of long-standing up-swing for the ETF venture institutional investors.

ProShares UltraShort

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares UltraShort SP500 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, ProShares UltraShort is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with GraniteShares 15x and ProShares UltraShort

The main advantage of trading using opposite GraniteShares 15x and ProShares UltraShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares 15x position performs unexpectedly, ProShares UltraShort 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 UltraShort will offset losses from the drop in ProShares UltraShort's long position.

The idea behind GraniteShares 15x Long and ProShares UltraShort SP500 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.