Correlation Between ETF Opportunities and ProShares Ultra

Can any of the company-specific risk be diversified away by investing in both ETF Opportunities and ProShares Ultra 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 ETF Opportunities and ProShares Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ETF Opportunities Trust and ProShares Ultra Bloomberg, you can compare the effects of market volatilities on ETF Opportunities and ProShares Ultra 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 ETF Opportunities with a short position of ProShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETF Opportunities and ProShares Ultra.

Diversification Opportunities for ETF Opportunities and ProShares Ultra

-0.36

Correlation Coefficient

ETF Opportunities  ProShares Ultra

Very good diversification

The 3 months correlation between ETF and ProShares is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding ETF Opportunities Trust and ProShares Ultra Bloomberg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Ultra Bloomberg and ETF Opportunities 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 ETF Opportunities Trust are associated (or correlated) with ProShares Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Ultra Bloomberg has no effect on the direction of ETF Opportunities i.e., ETF Opportunities and ProShares Ultra go up and down completely randomly.

Pair Corralation between ETF Opportunities and ProShares Ultra

Given the investment horizon of 90 days ETF Opportunities Trust is expected to generate 0.12 times more return on investment than ProShares Ultra. However, ETF Opportunities Trust is 8.5 times less risky than ProShares Ultra. It trades about 0.11 of its potential returns per unit of risk. ProShares Ultra Bloomberg is currently generating about -0.06 per unit of risk. If you would invest  2,440  in ETF Opportunities Trust on October 4, 2024 and sell it today you would earn a total of  1,219  from holding ETF Opportunities Trust or generate 49.96% return on investment over 90 days.

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

ETF Opportunities Trust  vs.  ProShares Ultra Bloomberg

ETF Opportunities Trust

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ETF Opportunities Trust are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable essential indicators, ETF Opportunities is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

ProShares Ultra Bloomberg

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares Ultra Bloomberg are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating forward indicators, ProShares Ultra disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ETF Opportunities and ProShares Ultra

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

The idea behind ETF Opportunities Trust and ProShares Ultra Bloomberg 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.