Correlation Between SPDR DoubleLine and ProShares High

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

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

Diversification Opportunities for SPDR DoubleLine and ProShares High

0.3

Correlation Coefficient

SPDR DoubleLine  ProShares High

Weak diversification

The 3 months correlation between SPDR and ProShares is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding SPDR DoubleLine Short and ProShares High YieldInterest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares High Yield and SPDR DoubleLine 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 SPDR DoubleLine Short are associated (or correlated) with ProShares High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares High Yield has no effect on the direction of SPDR DoubleLine i.e., SPDR DoubleLine and ProShares High go up and down completely randomly.

Pair Corralation between SPDR DoubleLine and ProShares High

Given the investment horizon of 90 days SPDR DoubleLine is expected to generate 1.84 times less return on investment than ProShares High. But when comparing it to its historical volatility, SPDR DoubleLine Short is 1.65 times less risky than ProShares High. It trades about 0.21 of its potential returns per unit of risk. ProShares High YieldInterest is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  6,518  in ProShares High YieldInterest on September 19, 2024 and sell it today you would earn a total of  51.00  from holding ProShares High YieldInterest or generate 0.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

SPDR DoubleLine Short  vs.  ProShares High YieldInterest

SPDR DoubleLine Short

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR DoubleLine Short are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, SPDR DoubleLine is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

ProShares High Yield

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares High YieldInterest are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical indicators, ProShares High is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SPDR DoubleLine and ProShares High

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

The idea behind SPDR DoubleLine Short and ProShares High YieldInterest 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 Stocks Directory module to find actively traded stocks across global markets.