Correlation Between ProShares Ultra and Running Oak

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

By analyzing existing cross correlation between ProShares Ultra Euro and Running Oak Efficient, you can compare the effects of market volatilities on ProShares Ultra and Running Oak 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 Running Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and Running Oak.

Diversification Opportunities for ProShares Ultra and Running Oak

-0.84

Correlation Coefficient

ProShares Ultra  Running Oak

Pay attention - limited upside

The 3 months correlation between ProShares and Running is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Euro and Running Oak Efficient in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Running Oak Efficient 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 Euro are associated (or correlated) with Running Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Running Oak Efficient has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Running Oak go up and down completely randomly.

Pair Corralation between ProShares Ultra and Running Oak

Considering the 90-day investment horizon ProShares Ultra Euro is expected to under-perform the Running Oak. In addition to that, ProShares Ultra is 1.29 times more volatile than Running Oak Efficient. It trades about -0.13 of its total potential returns per unit of risk. Running Oak Efficient is currently generating about 0.18 per unit of volatility. If you would invest  3,232  in Running Oak Efficient on September 1, 2024 and sell it today you would earn a total of  312.00  from holding Running Oak Efficient or generate 9.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

ProShares Ultra Euro  vs.  Running Oak Efficient

ProShares Ultra Euro

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ProShares Ultra Euro has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Etf's essential indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

Running Oak Efficient

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Running Oak Efficient are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Running Oak may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with ProShares Ultra and Running Oak

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

The idea behind ProShares Ultra Euro and Running Oak Efficient 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.

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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.