Correlation Between ProShares Ultra and BNY Mellon

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

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

Diversification Opportunities for ProShares Ultra and BNY Mellon

-0.59

Correlation Coefficient

ProShares Ultra  BNY Mellon

Excellent diversification

The 3 months correlation between ProShares and BNY is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Semiconductors and BNY Mellon Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNY Mellon Core 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 Semiconductors are associated (or correlated) with BNY Mellon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNY Mellon Core has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and BNY Mellon go up and down completely randomly.

Pair Corralation between ProShares Ultra and BNY Mellon

Considering the 90-day investment horizon ProShares Ultra Semiconductors is expected to under-perform the BNY Mellon. In addition to that, ProShares Ultra is 21.81 times more volatile than BNY Mellon Core. It trades about -0.09 of its total potential returns per unit of risk. BNY Mellon Core is currently generating about 0.14 per unit of volatility. If you would invest  4,100  in BNY Mellon Core on December 28, 2024 and sell it today you would earn a total of  103.00  from holding BNY Mellon Core or generate 2.51% return on investment over 90 days.

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

ProShares Ultra Semiconductors  vs.  BNY Mellon Core

ProShares Ultra Semi

Risk-Adjusted Performance

Very Weak

Over the last 90 days ProShares Ultra Semiconductors has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Etf's basic 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.

BNY Mellon Core

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BNY Mellon Core are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, BNY Mellon is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with ProShares Ultra and BNY Mellon

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

The idea behind ProShares Ultra Semiconductors and BNY Mellon Core 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 Transaction History module to view history of all your transactions and understand their impact on performance.