Correlation Between PROSHARES ULTRASHORT and Orion Group

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

By analyzing existing cross correlation between PROSHARES ULTRASHORT RUSSELL and Orion Group Holdings, you can compare the effects of market volatilities on PROSHARES ULTRASHORT and Orion Group 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 Orion Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of PROSHARES ULTRASHORT and Orion Group.

Diversification Opportunities for PROSHARES ULTRASHORT and Orion Group

0.34

Correlation Coefficient

PROSHARES ULTRASHORT  Orion Group

Weak diversification

The 3 months correlation between PROSHARES and Orion is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding PROSHARES ULTRASHORT RUSSELL and Orion Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orion Group Holdings 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 RUSSELL are associated (or correlated) with Orion Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orion Group Holdings has no effect on the direction of PROSHARES ULTRASHORT i.e., PROSHARES ULTRASHORT and Orion Group go up and down completely randomly.

Pair Corralation between PROSHARES ULTRASHORT and Orion Group

Considering the 90-day investment horizon PROSHARES ULTRASHORT RUSSELL is expected to generate 1.83 times more return on investment than Orion Group. However, PROSHARES ULTRASHORT is 1.83 times more volatile than Orion Group Holdings. It trades about 0.08 of its potential returns per unit of risk. Orion Group Holdings is currently generating about -0.07 per unit of risk. If you would invest  74.00  in PROSHARES ULTRASHORT RUSSELL on December 20, 2024 and sell it today you would earn a total of  16.89  from holding PROSHARES ULTRASHORT RUSSELL or generate 22.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

PROSHARES ULTRASHORT RUSSELL  vs.  Orion Group Holdings

PROSHARES ULTRASHORT

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PROSHARES ULTRASHORT RUSSELL are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite sluggish forward-looking signals, PROSHARES ULTRASHORT disclosed solid returns over the last few months and may actually be approaching a breakup point.

Orion Group Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Orion Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock'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 firm investors.

Pair Trading with PROSHARES ULTRASHORT and Orion Group

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

The idea behind PROSHARES ULTRASHORT RUSSELL and Orion Group Holdings 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..