Correlation Between ProShares Ultra and Hartford Municipal

Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and Hartford Municipal 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 Hartford Municipal 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 Hartford Municipal Opportunities, you can compare the effects of market volatilities on ProShares Ultra and Hartford Municipal 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 Hartford Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and Hartford Municipal.

Diversification Opportunities for ProShares Ultra and Hartford Municipal

-0.51

Correlation Coefficient

ProShares Ultra  Hartford Municipal

Excellent diversification

The 3 months correlation between ProShares and Hartford is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Semiconductors and Hartford Municipal Opportuniti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Municipal 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 Hartford Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Municipal has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Hartford Municipal go up and down completely randomly.

Pair Corralation between ProShares Ultra and Hartford Municipal

Considering the 90-day investment horizon ProShares Ultra Semiconductors is expected to under-perform the Hartford Municipal. In addition to that, ProShares Ultra is 32.04 times more volatile than Hartford Municipal Opportunities. It trades about -0.06 of its total potential returns per unit of risk. Hartford Municipal Opportunities is currently generating about 0.05 per unit of volatility. If you would invest  3,835  in Hartford Municipal Opportunities on December 22, 2024 and sell it today you would earn a total of  22.00  from holding Hartford Municipal Opportunities or generate 0.57% 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.  Hartford Municipal Opportuniti

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.

Hartford Municipal

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hartford Municipal Opportunities are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Hartford Municipal is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with ProShares Ultra and Hartford Municipal

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

The idea behind ProShares Ultra Semiconductors and Hartford Municipal Opportunities 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.