Correlation Between ProShares Ultra and JPMorgan Diversified

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

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

Diversification Opportunities for ProShares Ultra and JPMorgan Diversified

-0.8

Correlation Coefficient

ProShares Ultra  JPMorgan Diversified

Pay attention - limited upside

The 3 months correlation between ProShares and JPMorgan is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Euro and JPMorgan Diversified Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Diversified 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 Euro are associated (or correlated) with JPMorgan Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Diversified has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and JPMorgan Diversified go up and down completely randomly.

Pair Corralation between ProShares Ultra and JPMorgan Diversified

Considering the 90-day investment horizon ProShares Ultra Euro is expected to under-perform the JPMorgan Diversified. In addition to that, ProShares Ultra is 1.55 times more volatile than JPMorgan Diversified Return. It trades about -0.15 of its total potential returns per unit of risk. JPMorgan Diversified Return is currently generating about 0.21 per unit of volatility. If you would invest  10,135  in JPMorgan Diversified Return on September 3, 2024 and sell it today you would earn a total of  957.00  from holding JPMorgan Diversified Return or generate 9.44% return on investment over 90 days.

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

ProShares Ultra Euro  vs.  JPMorgan Diversified Return

ProShares Ultra Euro

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ProShares Ultra Euro has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Etf's essential indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

JPMorgan Diversified

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Diversified Return are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady primary indicators, JPMorgan Diversified may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with ProShares Ultra and JPMorgan Diversified

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

The idea behind ProShares Ultra Euro and JPMorgan Diversified Return 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.