Correlation Between Prime Medicine, and ProShares

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

By analyzing existing cross correlation between Prime Medicine, Common and ProShares SP Kensho, you can compare the effects of market volatilities on Prime Medicine, and ProShares 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 Prime Medicine, with a short position of ProShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prime Medicine, and ProShares.

Diversification Opportunities for Prime Medicine, and ProShares

0.88

Correlation Coefficient

Prime Medicine,  ProShares

Very poor diversification

The 3 months correlation between Prime and ProShares is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Prime Medicine, Common and ProShares SP Kensho in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares SP Kensho and Prime Medicine, 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 Prime Medicine, Common are associated (or correlated) with ProShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares SP Kensho has no effect on the direction of Prime Medicine, i.e., Prime Medicine, and ProShares go up and down completely randomly.

Pair Corralation between Prime Medicine, and ProShares

Given the investment horizon of 90 days Prime Medicine, Common is expected to under-perform the ProShares. In addition to that, Prime Medicine, is 2.33 times more volatile than ProShares SP Kensho. It trades about -0.09 of its total potential returns per unit of risk. ProShares SP Kensho is currently generating about -0.12 per unit of volatility. If you would invest  2,223  in ProShares SP Kensho on December 26, 2024 and sell it today you would lose (403.01) from holding ProShares SP Kensho or give up 18.13% of portfolio value over 90 days.

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

Prime Medicine, Common  vs.  ProShares SP Kensho

Prime Medicine, Common

Risk-Adjusted Performance

Very Weak

Over the last 90 days Prime Medicine, Common has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Etf's primary indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the fund shareholders.

ProShares SP Kensho

Risk-Adjusted Performance

Very Weak

Over the last 90 days ProShares SP Kensho has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Etf's technical and fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

Pair Trading with Prime Medicine, and ProShares

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

The idea behind Prime Medicine, Common and ProShares SP Kensho 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.