Correlation Between ProShares UltraShort and JPMorgan BetaBuilders
Can any of the company-specific risk be diversified away by investing in both ProShares UltraShort and JPMorgan BetaBuilders 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 UltraShort and JPMorgan BetaBuilders into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares UltraShort Yen and JPMorgan BetaBuilders International, you can compare the effects of market volatilities on ProShares UltraShort and JPMorgan BetaBuilders 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 UltraShort with a short position of JPMorgan BetaBuilders. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraShort and JPMorgan BetaBuilders.
Diversification Opportunities for ProShares UltraShort and JPMorgan BetaBuilders
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ProShares and JPMorgan is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraShort Yen and JPMorgan BetaBuilders Internat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan BetaBuilders and ProShares UltraShort 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 UltraShort Yen are associated (or correlated) with JPMorgan BetaBuilders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan BetaBuilders has no effect on the direction of ProShares UltraShort i.e., ProShares UltraShort and JPMorgan BetaBuilders go up and down completely randomly.
Pair Corralation between ProShares UltraShort and JPMorgan BetaBuilders
Considering the 90-day investment horizon ProShares UltraShort Yen is expected to generate 1.93 times more return on investment than JPMorgan BetaBuilders. However, ProShares UltraShort is 1.93 times more volatile than JPMorgan BetaBuilders International. It trades about 0.08 of its potential returns per unit of risk. JPMorgan BetaBuilders International is currently generating about 0.03 per unit of risk. If you would invest 4,385 in ProShares UltraShort Yen on October 31, 2024 and sell it today you would earn a total of 300.00 from holding ProShares UltraShort Yen or generate 6.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
ProShares UltraShort Yen vs. JPMorgan BetaBuilders Internat
Performance |
Timeline |
ProShares UltraShort Yen |
JPMorgan BetaBuilders |
ProShares UltraShort and JPMorgan BetaBuilders Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ProShares UltraShort and JPMorgan BetaBuilders
The main advantage of trading using opposite ProShares UltraShort and JPMorgan BetaBuilders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraShort position performs unexpectedly, JPMorgan BetaBuilders 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 JPMorgan BetaBuilders will offset losses from the drop in JPMorgan BetaBuilders' long position.ProShares UltraShort vs. ProShares UltraShort Euro | ||
ProShares UltraShort vs. ProShares Ultra Yen | ||
ProShares UltraShort vs. ProShares Ultra Euro | ||
ProShares UltraShort vs. ProShares UltraShort MSCI |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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