Correlation Between FolioBeyond Rising and ProShares High

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Can any of the company-specific risk be diversified away by investing in both FolioBeyond Rising and ProShares High 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 FolioBeyond Rising and ProShares High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FolioBeyond Rising Rates and ProShares High YieldInterest, you can compare the effects of market volatilities on FolioBeyond Rising and ProShares High 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 FolioBeyond Rising with a short position of ProShares High. Check out your portfolio center. Please also check ongoing floating volatility patterns of FolioBeyond Rising and ProShares High.

Diversification Opportunities for FolioBeyond Rising and ProShares High

0.92
  Correlation Coefficient

Almost no diversification

The 3 months correlation between FolioBeyond and ProShares is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding FolioBeyond Rising Rates and ProShares High YieldInterest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares High Yield and FolioBeyond Rising 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 FolioBeyond Rising Rates are associated (or correlated) with ProShares High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares High Yield has no effect on the direction of FolioBeyond Rising i.e., FolioBeyond Rising and ProShares High go up and down completely randomly.

Pair Corralation between FolioBeyond Rising and ProShares High

Given the investment horizon of 90 days FolioBeyond Rising Rates is expected to generate 1.78 times more return on investment than ProShares High. However, FolioBeyond Rising is 1.78 times more volatile than ProShares High YieldInterest. It trades about 0.07 of its potential returns per unit of risk. ProShares High YieldInterest is currently generating about 0.11 per unit of risk. If you would invest  2,765  in FolioBeyond Rising Rates on September 19, 2024 and sell it today you would earn a total of  876.00  from holding FolioBeyond Rising Rates or generate 31.68% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy99.8%
ValuesDaily Returns

FolioBeyond Rising Rates  vs.  ProShares High YieldInterest

 Performance 
       Timeline  
FolioBeyond Rising Rates 

Risk-Adjusted Performance

21 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in FolioBeyond Rising Rates are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, FolioBeyond Rising may actually be approaching a critical reversion point that can send shares even higher in January 2025.
ProShares High Yield 

Risk-Adjusted Performance

19 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in ProShares High YieldInterest are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical indicators, ProShares High is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

FolioBeyond Rising and ProShares High Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with FolioBeyond Rising and ProShares High

The main advantage of trading using opposite FolioBeyond Rising and ProShares High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FolioBeyond Rising position performs unexpectedly, ProShares High 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 High will offset losses from the drop in ProShares High's long position.
The idea behind FolioBeyond Rising Rates and ProShares High YieldInterest 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.

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