Correlation Between ProShares Ultra and Pimco Income

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

Diversification Opportunities for ProShares Ultra and Pimco Income

-0.71

Correlation Coefficient

ProShares Ultra  Pimco Income

Pay attention - limited upside

The 3 months correlation between ProShares and Pimco is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Semiconductors and Pimco Income Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Income Strategy 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 Pimco Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Income Strategy has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Pimco Income go up and down completely randomly.

Pair Corralation between ProShares Ultra and Pimco Income

Considering the 90-day investment horizon ProShares Ultra Semiconductors is expected to under-perform the Pimco Income. In addition to that, ProShares Ultra is 18.84 times more volatile than Pimco Income Strategy. It trades about -0.09 of its total potential returns per unit of risk. Pimco Income Strategy is currently generating about 0.27 per unit of volatility. If you would invest  807.00  in Pimco Income Strategy on December 28, 2024 and sell it today you would earn a total of  47.00  from holding Pimco Income Strategy or generate 5.82% return on investment over 90 days.

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

ProShares Ultra Semiconductors  vs.  Pimco Income Strategy

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.

Pimco Income Strategy

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Income Strategy are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent technical and fundamental indicators, Pimco Income is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with ProShares Ultra and Pimco Income

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

The idea behind ProShares Ultra Semiconductors and Pimco Income Strategy 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.