Correlation Between ProShares UltraShort and SOGU

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

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

Diversification Opportunities for ProShares UltraShort and SOGU

0.74

Correlation Coefficient

ProShares UltraShort  SOGU

Poor diversification

The 3 months correlation between ProShares and SOGU is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraShort SP500 and SOGU in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOGU and ProShares UltraShort 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 UltraShort SP500 are associated (or correlated) with SOGU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOGU has no effect on the direction of ProShares UltraShort i.e., ProShares UltraShort and SOGU go up and down completely randomly.

Pair Corralation between ProShares UltraShort and SOGU

If you would invest  1,862  in ProShares UltraShort SP500 on September 29, 2024 and sell it today you would earn a total of  45.00  from holding ProShares UltraShort SP500 or generate 2.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	5.0%
Values	Daily Returns

ProShares UltraShort SP500  vs.  SOGU

ProShares UltraShort

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ProShares UltraShort SP500 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Etf's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

SOGU

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SOGU has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, SOGU is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with ProShares UltraShort and SOGU

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

The idea behind ProShares UltraShort SP500 and SOGU 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.