Correlation Between ProShares Metaverse and Fidelity Metaverse

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

Diversification Opportunities for ProShares Metaverse and Fidelity Metaverse

0.87

Correlation Coefficient

ProShares Metaverse  Fidelity Metaverse

Very poor diversification

The 3 months correlation between ProShares and Fidelity is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Metaverse ETF and Fidelity Metaverse ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Metaverse ETF 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 Fidelity Metaverse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Metaverse ETF has no effect on the direction of ProShares Metaverse i.e., ProShares Metaverse and Fidelity Metaverse go up and down completely randomly.

Pair Corralation between ProShares Metaverse and Fidelity Metaverse

Given the investment horizon of 90 days ProShares Metaverse ETF is expected to under-perform the Fidelity Metaverse. In addition to that, ProShares Metaverse is 1.57 times more volatile than Fidelity Metaverse ETF. It trades about -0.04 of its total potential returns per unit of risk. Fidelity Metaverse ETF is currently generating about -0.06 per unit of volatility. If you would invest  2,987  in Fidelity Metaverse ETF on December 30, 2024 and sell it today you would lose (187.00) from holding Fidelity Metaverse ETF or give up 6.26% of portfolio value over 90 days.

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

ProShares Metaverse ETF  vs.  Fidelity Metaverse ETF

ProShares Metaverse ETF

Risk-Adjusted Performance

Very Weak

Over the last 90 days ProShares Metaverse ETF has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Etf's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

Fidelity Metaverse ETF

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fidelity Metaverse ETF has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Fidelity Metaverse is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with ProShares Metaverse and Fidelity Metaverse

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

The idea behind ProShares Metaverse ETF and Fidelity Metaverse ETF 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.