Correlation Between ProShares Supply and Rbb Fund

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

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

Diversification Opportunities for ProShares Supply and Rbb Fund

0.76

Correlation Coefficient

ProShares Supply  Rbb Fund

Poor diversification

The 3 months correlation between ProShares and Rbb is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Supply Chain and Rbb Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rbb Fund and ProShares Supply 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 Supply Chain are associated (or correlated) with Rbb Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rbb Fund has no effect on the direction of ProShares Supply i.e., ProShares Supply and Rbb Fund go up and down completely randomly.

Pair Corralation between ProShares Supply and Rbb Fund

Given the investment horizon of 90 days ProShares Supply Chain is expected to generate 0.87 times more return on investment than Rbb Fund. However, ProShares Supply Chain is 1.15 times less risky than Rbb Fund. It trades about -0.04 of its potential returns per unit of risk. Rbb Fund is currently generating about -0.05 per unit of risk. If you would invest  3,814  in ProShares Supply Chain on December 26, 2024 and sell it today you would lose (102.00) from holding ProShares Supply Chain or give up 2.67% of portfolio value over 90 days.

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

ProShares Supply Chain  vs.  Rbb Fund

ProShares Supply Chain

Risk-Adjusted Performance

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.

Rbb Fund

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rbb Fund has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, Rbb Fund is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with ProShares Supply and Rbb Fund

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

The idea behind ProShares Supply Chain and Rbb Fund 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.