Correlation Between IShares Dividend and ProShares Smart

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

By analyzing existing cross correlation between iShares Dividend and and ProShares Smart Materials, you can compare the effects of market volatilities on IShares Dividend and ProShares Smart 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 IShares Dividend with a short position of ProShares Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Dividend and ProShares Smart.

Diversification Opportunities for IShares Dividend and ProShares Smart

-0.25

Correlation Coefficient

IShares Dividend  ProShares Smart

Very good diversification

The 3 months correlation between IShares and ProShares is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding iShares Dividend and and ProShares Smart Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Smart Materials and IShares Dividend 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 iShares Dividend and are associated (or correlated) with ProShares Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Smart Materials has no effect on the direction of IShares Dividend i.e., IShares Dividend and ProShares Smart go up and down completely randomly.

Pair Corralation between IShares Dividend and ProShares Smart

Given the investment horizon of 90 days iShares Dividend and is expected to generate 0.67 times more return on investment than ProShares Smart. However, iShares Dividend and is 1.48 times less risky than ProShares Smart. It trades about 0.18 of its potential returns per unit of risk. ProShares Smart Materials is currently generating about -0.02 per unit of risk. If you would invest  4,715  in iShares Dividend and on September 2, 2024 and sell it today you would earn a total of  380.00  from holding iShares Dividend and or generate 8.06% return on investment over 90 days.

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

iShares Dividend and  vs.  ProShares Smart Materials

iShares Dividend

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Dividend and are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, IShares Dividend may actually be approaching a critical reversion point that can send shares even higher in January 2025.

ProShares Smart Materials

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ProShares Smart Materials has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, ProShares Smart 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 IShares Dividend and ProShares Smart

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

The idea behind iShares Dividend and and ProShares Smart Materials 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.