Correlation Between US Global and ProShares Supply

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

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

Diversification Opportunities for US Global and ProShares Supply

0.51

Correlation Coefficient

US Global  ProShares Supply

Very weak diversification

The 3 months correlation between SEA and ProShares is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding US Global Sea and ProShares Supply Chain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Supply Chain and US Global 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 US Global Sea are associated (or correlated) with ProShares Supply. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Supply Chain has no effect on the direction of US Global i.e., US Global and ProShares Supply go up and down completely randomly.

Pair Corralation between US Global and ProShares Supply

Considering the 90-day investment horizon US Global is expected to generate 3.15 times less return on investment than ProShares Supply. In addition to that, US Global is 1.4 times more volatile than ProShares Supply Chain. It trades about 0.01 of its total potential returns per unit of risk. ProShares Supply Chain is currently generating about 0.03 per unit of volatility. If you would invest  3,309  in ProShares Supply Chain on October 7, 2024 and sell it today you would earn a total of  489.00  from holding ProShares Supply Chain or generate 14.78% return on investment over 90 days.

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

US Global Sea  vs.  ProShares Supply Chain

US Global Sea

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days US Global Sea has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Etf's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

ProShares Supply Chain

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ProShares Supply Chain has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, ProShares Supply is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with US Global and ProShares Supply

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

The idea behind US Global Sea and ProShares Supply Chain 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.