Correlation Between ProShares Short and BondBloxx ETF

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

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

Diversification Opportunities for ProShares Short and BondBloxx ETF

-0.36

Correlation Coefficient

ProShares Short  BondBloxx ETF

Very good diversification

The 3 months correlation between ProShares and BondBloxx is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Short High and BondBloxx ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BondBloxx ETF Trust and ProShares Short 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 Short High are associated (or correlated) with BondBloxx ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BondBloxx ETF Trust has no effect on the direction of ProShares Short i.e., ProShares Short and BondBloxx ETF go up and down completely randomly.

Pair Corralation between ProShares Short and BondBloxx ETF

Considering the 90-day investment horizon ProShares Short High is expected to under-perform the BondBloxx ETF. But the etf apears to be less risky and, when comparing its historical volatility, ProShares Short High is 1.72 times less risky than BondBloxx ETF. The etf trades about -0.02 of its potential returns per unit of risk. The BondBloxx ETF Trust is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  3,933  in BondBloxx ETF Trust on September 12, 2024 and sell it today you would earn a total of  52.00  from holding BondBloxx ETF Trust or generate 1.32% return on investment over 90 days.

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

ProShares Short High  vs.  BondBloxx ETF Trust

ProShares Short High

Risk-Adjusted Performance

0 of 100

Very Weak

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

BondBloxx ETF Trust

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BondBloxx ETF Trust are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, BondBloxx ETF 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 Short and BondBloxx ETF

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

The idea behind ProShares Short High and BondBloxx ETF Trust 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..