Correlation Between ProShares UltraPro and Tuttle Capital

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

By analyzing existing cross correlation between ProShares UltraPro MidCap400 and Tuttle Capital Daily, you can compare the effects of market volatilities on ProShares UltraPro and Tuttle Capital 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 UltraPro with a short position of Tuttle Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraPro and Tuttle Capital.

Diversification Opportunities for ProShares UltraPro and Tuttle Capital

-0.89

Correlation Coefficient

ProShares UltraPro  Tuttle Capital

Pay attention - limited upside

The 3 months correlation between ProShares and Tuttle is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraPro MidCap400 and Tuttle Capital Daily in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tuttle Capital Daily and ProShares UltraPro 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 UltraPro MidCap400 are associated (or correlated) with Tuttle Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tuttle Capital Daily has no effect on the direction of ProShares UltraPro i.e., ProShares UltraPro and Tuttle Capital go up and down completely randomly.

Pair Corralation between ProShares UltraPro and Tuttle Capital

Given the investment horizon of 90 days ProShares UltraPro MidCap400 is expected to under-perform the Tuttle Capital. In addition to that, ProShares UltraPro is 1.11 times more volatile than Tuttle Capital Daily. It trades about -0.11 of its total potential returns per unit of risk. Tuttle Capital Daily is currently generating about 0.07 per unit of volatility. If you would invest  1,324  in Tuttle Capital Daily on December 29, 2024 and sell it today you would earn a total of  145.00  from holding Tuttle Capital Daily or generate 10.95% return on investment over 90 days.

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

ProShares UltraPro MidCap400  vs.  Tuttle Capital Daily

ProShares UltraPro

Risk-Adjusted Performance

Very Weak

Over the last 90 days ProShares UltraPro MidCap400 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Etf's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the fund shareholders.

Tuttle Capital Daily

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tuttle Capital Daily are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Tuttle Capital exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ProShares UltraPro and Tuttle Capital

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

The idea behind ProShares UltraPro MidCap400 and Tuttle Capital Daily 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 Commodity Directory module to find actively traded commodities issued by global exchanges.