Correlation Between ProShares UltraShort and DSJA

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

By analyzing existing cross correlation between ProShares UltraShort Euro and DSJA, you can compare the effects of market volatilities on ProShares UltraShort and DSJA 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 DSJA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraShort and DSJA.

Diversification Opportunities for ProShares UltraShort and DSJA

0.95

Correlation Coefficient

ProShares UltraShort  DSJA

Almost no diversification

The 3 months correlation between ProShares and DSJA is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraShort Euro and DSJA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DSJA 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 Euro are associated (or correlated) with DSJA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DSJA has no effect on the direction of ProShares UltraShort i.e., ProShares UltraShort and DSJA go up and down completely randomly.

Pair Corralation between ProShares UltraShort and DSJA

If you would invest  2,967  in ProShares UltraShort Euro on September 26, 2024 and sell it today you would earn a total of  503.00  from holding ProShares UltraShort Euro or generate 16.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	1.59%
Values	Daily Returns

ProShares UltraShort Euro  vs.  DSJA

ProShares UltraShort Euro

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares UltraShort Euro are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, ProShares UltraShort displayed solid returns over the last few months and may actually be approaching a breakup point.

DSJA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DSJA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward-looking indicators, DSJA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ProShares UltraShort and DSJA

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

The idea behind ProShares UltraShort Euro and DSJA 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.