Correlation Between ProShares Metaverse and Dow Jones

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both ProShares Metaverse and Dow Jones 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 Metaverse and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Metaverse ETF and Dow Jones Industrial, you can compare the effects of market volatilities on ProShares Metaverse and Dow Jones 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 Metaverse with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Metaverse and Dow Jones.

Diversification Opportunities for ProShares Metaverse and Dow Jones

0.89
  Correlation Coefficient

Very poor diversification

The 3 months correlation between ProShares and Dow is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Metaverse ETF and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and ProShares Metaverse 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 Metaverse ETF are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of ProShares Metaverse i.e., ProShares Metaverse and Dow Jones go up and down completely randomly.
    Optimize

Pair Corralation between ProShares Metaverse and Dow Jones

Given the investment horizon of 90 days ProShares Metaverse ETF is expected to generate 1.56 times more return on investment than Dow Jones. However, ProShares Metaverse is 1.56 times more volatile than Dow Jones Industrial. It trades about 0.26 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.24 per unit of risk. If you would invest  4,053  in ProShares Metaverse ETF on September 6, 2024 and sell it today you would earn a total of  835.00  from holding ProShares Metaverse ETF or generate 20.6% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

ProShares Metaverse ETF  vs.  Dow Jones Industrial

 Performance 
       Timeline  

ProShares Metaverse and Dow Jones Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ProShares Metaverse and Dow Jones

The main advantage of trading using opposite ProShares Metaverse and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Metaverse position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.
The idea behind ProShares Metaverse ETF and Dow Jones Industrial 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.

Other Complementary Tools

Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Transaction History
View history of all your transactions and understand their impact on performance
Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance