Correlation Between ProShares Ultra and ProShares UltraPro
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and ProShares UltraPro 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 ProShares UltraPro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Ultra SP500 and ProShares UltraPro Dow30, you can compare the effects of market volatilities on ProShares Ultra and ProShares UltraPro 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 ProShares UltraPro. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and ProShares UltraPro.
Diversification Opportunities for ProShares Ultra and ProShares UltraPro
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ProShares and ProShares is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra SP500 and ProShares UltraPro Dow30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraPro Dow30 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 SP500 are associated (or correlated) with ProShares UltraPro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares UltraPro Dow30 has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and ProShares UltraPro go up and down completely randomly.
Pair Corralation between ProShares Ultra and ProShares UltraPro
Considering the 90-day investment horizon ProShares Ultra SP500 is expected to generate 0.75 times more return on investment than ProShares UltraPro. However, ProShares Ultra SP500 is 1.34 times less risky than ProShares UltraPro. It trades about -0.1 of its potential returns per unit of risk. ProShares UltraPro Dow30 is currently generating about -0.31 per unit of risk. If you would invest 9,655 in ProShares Ultra SP500 on September 24, 2024 and sell it today you would lose (332.00) from holding ProShares Ultra SP500 or give up 3.44% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 95.24% |
Values | Daily Returns |
ProShares Ultra SP500 vs. ProShares UltraPro Dow30
Performance |
Timeline |
ProShares Ultra SP500 |
ProShares UltraPro Dow30 |
ProShares Ultra and ProShares UltraPro Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ProShares Ultra and ProShares UltraPro
The main advantage of trading using opposite ProShares Ultra and ProShares UltraPro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, ProShares UltraPro 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 UltraPro will offset losses from the drop in ProShares UltraPro's long position.ProShares Ultra vs. ProShares Ultra QQQ | ProShares Ultra vs. ProShares Ultra Dow30 | ProShares Ultra vs. ProShares UltraShort SP500 | ProShares Ultra vs. ProShares Ultra Financials |
ProShares UltraPro vs. Direxion Daily SP500 | ProShares UltraPro vs. ProShares UltraPro SP500 | ProShares UltraPro vs. Direxion Daily Technology | ProShares UltraPro vs. MicroSectors FANG Index |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Bonds Directory Find actively traded corporate debentures issued by US companies |