Correlation Between ProShares Ultra and KraneShares Bosera

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

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

Diversification Opportunities for ProShares Ultra and KraneShares Bosera

-0.43

Correlation Coefficient

ProShares Ultra  KraneShares Bosera

Very good diversification

The 3 months correlation between ProShares and KraneShares is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Technology and KraneShares Bosera MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares Bosera MSCI and ProShares Ultra 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 ProShares Ultra Technology are associated (or correlated) with KraneShares Bosera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares Bosera MSCI has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and KraneShares Bosera go up and down completely randomly.

Pair Corralation between ProShares Ultra and KraneShares Bosera

Considering the 90-day investment horizon ProShares Ultra Technology is expected to under-perform the KraneShares Bosera. In addition to that, ProShares Ultra is 2.95 times more volatile than KraneShares Bosera MSCI. It trades about -0.12 of its total potential returns per unit of risk. KraneShares Bosera MSCI is currently generating about -0.01 per unit of volatility. If you would invest  2,383  in KraneShares Bosera MSCI on December 30, 2024 and sell it today you would lose (21.00) from holding KraneShares Bosera MSCI or give up 0.88% of portfolio value over 90 days.

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

ProShares Ultra Technology  vs.  KraneShares Bosera MSCI

ProShares Ultra Tech

Risk-Adjusted Performance

Very Weak

Over the last 90 days ProShares Ultra Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Etf's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

KraneShares Bosera MSCI

Risk-Adjusted Performance

Very Weak

Over the last 90 days KraneShares Bosera MSCI has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, KraneShares Bosera is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ProShares Ultra and KraneShares Bosera

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

The idea behind ProShares Ultra Technology and KraneShares Bosera MSCI 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.