Correlation Between ProShares Ultra and Neuberger Berman

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

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

Diversification Opportunities for ProShares Ultra and Neuberger Berman

-0.72

Correlation Coefficient

ProShares Ultra  Neuberger Berman

Pay attention - limited upside

The 3 months correlation between ProShares and Neuberger is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra QQQ and Neuberger Berman ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman ETF and ProShares Ultra 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 Ultra QQQ are associated (or correlated) with Neuberger Berman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neuberger Berman ETF has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Neuberger Berman go up and down completely randomly.

Pair Corralation between ProShares Ultra and Neuberger Berman

Considering the 90-day investment horizon ProShares Ultra QQQ is expected to generate 2.43 times more return on investment than Neuberger Berman. However, ProShares Ultra is 2.43 times more volatile than Neuberger Berman ETF. It trades about 0.18 of its potential returns per unit of risk. Neuberger Berman ETF is currently generating about -0.15 per unit of risk. If you would invest  9,558  in ProShares Ultra QQQ on September 13, 2024 and sell it today you would earn a total of  2,113  from holding ProShares Ultra QQQ or generate 22.11% return on investment over 90 days.

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

ProShares Ultra QQQ  vs.  Neuberger Berman ETF

ProShares Ultra QQQ

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares Ultra QQQ are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating essential indicators, ProShares Ultra exhibited solid returns over the last few months and may actually be approaching a breakup point.

Neuberger Berman ETF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Neuberger Berman ETF has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest uncertain performance, the Etf's technical and fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the ETF retail investors.

Pair Trading with ProShares Ultra and Neuberger Berman

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

The idea behind ProShares Ultra QQQ and Neuberger Berman ETF 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.