Correlation Between ProShares Ultra and ClearShares Piton

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

Diversification Opportunities for ProShares Ultra and ClearShares Piton

-0.84

Correlation Coefficient

ProShares Ultra  ClearShares Piton

Pay attention - limited upside

The 3 months correlation between ProShares and ClearShares is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Semiconductors and ClearShares Piton Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ClearShares Piton 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 ClearShares Piton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ClearShares Piton has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and ClearShares Piton go up and down completely randomly.

Pair Corralation between ProShares Ultra and ClearShares Piton

Considering the 90-day investment horizon ProShares Ultra Semiconductors is expected to under-perform the ClearShares Piton. In addition to that, ProShares Ultra is 37.47 times more volatile than ClearShares Piton Intermediate. It trades about -0.06 of its total potential returns per unit of risk. ClearShares Piton Intermediate is currently generating about 0.22 per unit of volatility. If you would invest  9,176  in ClearShares Piton Intermediate on December 22, 2024 and sell it today you would earn a total of  211.00  from holding ClearShares Piton Intermediate or generate 2.3% return on investment over 90 days.

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

ProShares Ultra Semiconductors  vs.  ClearShares Piton Intermediate

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.

ClearShares Piton

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ClearShares Piton Intermediate are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical and fundamental indicators, ClearShares Piton is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with ProShares Ultra and ClearShares Piton

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

The idea behind ProShares Ultra Semiconductors and ClearShares Piton Intermediate 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.