Correlation Between ProShares Ultra and Mairs Power

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

Diversification Opportunities for ProShares Ultra and Mairs Power

-0.36

Correlation Coefficient

ProShares Ultra  Mairs Power

Very good diversification

The 3 months correlation between ProShares and Mairs is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Semiconductors and Mairs Power Minnesota in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mairs Power Minnesota 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 Mairs Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mairs Power Minnesota has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Mairs Power go up and down completely randomly.

Pair Corralation between ProShares Ultra and Mairs Power

Considering the 90-day investment horizon ProShares Ultra Semiconductors is expected to under-perform the Mairs Power. In addition to that, ProShares Ultra is 18.18 times more volatile than Mairs Power Minnesota. It trades about -0.02 of its total potential returns per unit of risk. Mairs Power Minnesota is currently generating about 0.01 per unit of volatility. If you would invest  2,231  in Mairs Power Minnesota on December 1, 2024 and sell it today you would earn a total of  3.00  from holding Mairs Power Minnesota or generate 0.13% return on investment over 90 days.

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

ProShares Ultra Semiconductors  vs.  Mairs Power Minnesota

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 latest unfluctuating performance, the Etf's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

Mairs Power Minnesota

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mairs Power Minnesota has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Mairs Power is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with ProShares Ultra and Mairs Power

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

The idea behind ProShares Ultra Semiconductors and Mairs Power Minnesota 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.