Correlation Between IShares and ProShares Ultra

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

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

Diversification Opportunities for IShares and ProShares Ultra

-0.43

Correlation Coefficient

IShares  ProShares Ultra

Very good diversification

The 3 months correlation between IShares and ProShares is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding IShares and ProShares Ultra Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Ultra Real and IShares 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 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 Real has no effect on the direction of IShares i.e., IShares and ProShares Ultra go up and down completely randomly.

Pair Corralation between IShares and ProShares Ultra

If you would invest  7,196  in ProShares Ultra Real on August 30, 2024 and sell it today you would earn a total of  505.00  from holding ProShares Ultra Real or generate 7.02% return on investment over 90 days.

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

IShares  vs.  ProShares Ultra Real

IShares

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IShares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, IShares is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

ProShares Ultra Real

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares Ultra Real are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, ProShares Ultra may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with IShares and ProShares Ultra

The main advantage of trading using opposite IShares and ProShares Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares 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 IShares and ProShares Ultra Real 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.

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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.