Correlation Between ProShares Ultra and AB Active

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

Diversification Opportunities for ProShares Ultra and AB Active

-0.86

Correlation Coefficient

ProShares Ultra  AB Active

Pay attention - limited upside

The 3 months correlation between ProShares and SDFI is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Semiconductors and AB Active ETFs, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AB Active ETFs, 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 AB Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AB Active ETFs, has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and AB Active go up and down completely randomly.

Pair Corralation between ProShares Ultra and AB Active

Considering the 90-day investment horizon ProShares Ultra Semiconductors is expected to under-perform the AB Active. In addition to that, ProShares Ultra is 49.19 times more volatile than AB Active ETFs,. It trades about -0.09 of its total potential returns per unit of risk. AB Active ETFs, is currently generating about 0.21 per unit of volatility. If you would invest  3,500  in AB Active ETFs, on December 29, 2024 and sell it today you would earn a total of  60.00  from holding AB Active ETFs, or generate 1.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

ProShares Ultra Semiconductors  vs.  AB Active ETFs,

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.

AB Active ETFs,

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AB Active ETFs, are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical and fundamental indicators, AB Active is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with ProShares Ultra and AB Active

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

The idea behind ProShares Ultra Semiconductors and AB Active ETFs, 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.