Correlation Between ProShares Nanotechnology and Procure Space

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

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

Diversification Opportunities for ProShares Nanotechnology and Procure Space

-0.69

Correlation Coefficient

ProShares Nanotechnology  Procure Space

Excellent diversification

The 3 months correlation between ProShares and Procure is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Nanotechnology ETF and Procure Space ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procure Space ETF and ProShares Nanotechnology 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 Nanotechnology ETF are associated (or correlated) with Procure Space. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Procure Space ETF has no effect on the direction of ProShares Nanotechnology i.e., ProShares Nanotechnology and Procure Space go up and down completely randomly.

Pair Corralation between ProShares Nanotechnology and Procure Space

Given the investment horizon of 90 days ProShares Nanotechnology is expected to generate 6.53 times less return on investment than Procure Space. In addition to that, ProShares Nanotechnology is 1.11 times more volatile than Procure Space ETF. It trades about 0.01 of its total potential returns per unit of risk. Procure Space ETF is currently generating about 0.1 per unit of volatility. If you would invest  1,669  in Procure Space ETF on October 7, 2024 and sell it today you would earn a total of  750.00  from holding Procure Space ETF or generate 44.94% return on investment over 90 days.

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

ProShares Nanotechnology ETF  vs.  Procure Space ETF

ProShares Nanotechnology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ProShares Nanotechnology ETF has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, ProShares Nanotechnology is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Procure Space ETF

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Procure Space ETF are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain technical and fundamental indicators, Procure Space displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ProShares Nanotechnology and Procure Space

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

The idea behind ProShares Nanotechnology ETF and Procure Space ETF 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.