Correlation Between ProShares Short and Tuttle Capital

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

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

Diversification Opportunities for ProShares Short and Tuttle Capital

0.9

Correlation Coefficient

ProShares Short  Tuttle Capital

Almost no diversification

The 3 months correlation between ProShares and Tuttle is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Short SP500 and Tuttle Capital Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tuttle Capital Short and ProShares Short 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 Short SP500 are associated (or correlated) with Tuttle Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tuttle Capital Short has no effect on the direction of ProShares Short i.e., ProShares Short and Tuttle Capital go up and down completely randomly.

Pair Corralation between ProShares Short and Tuttle Capital

Allowing for the 90-day total investment horizon ProShares Short SP500 is expected to under-perform the Tuttle Capital. But the etf apears to be less risky and, when comparing its historical volatility, ProShares Short SP500 is 31.55 times less risky than Tuttle Capital. The etf trades about -0.09 of its potential returns per unit of risk. The Tuttle Capital Short is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  2,978  in Tuttle Capital Short on August 30, 2024 and sell it today you would earn a total of  2,044  from holding Tuttle Capital Short or generate 68.64% return on investment over 90 days.

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

ProShares Short SP500  vs.  Tuttle Capital Short

ProShares Short SP500

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ProShares Short SP500 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, ProShares Short is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Tuttle Capital Short

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tuttle Capital Short are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Tuttle Capital disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ProShares Short and Tuttle Capital

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

The idea behind ProShares Short SP500 and Tuttle Capital Short 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.