Correlation Between ProShares Ultra and ETF Series

Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and ETF Series 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 ETF Series 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 ETF Series Solutions, you can compare the effects of market volatilities on ProShares Ultra and ETF Series 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 ETF Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and ETF Series.

Diversification Opportunities for ProShares Ultra and ETF Series

-0.85

Correlation Coefficient

ProShares Ultra  ETF Series

Pay attention - limited upside

The 3 months correlation between ProShares and ETF is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Euro and ETF Series Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETF Series Solutions 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 ETF Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETF Series Solutions has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and ETF Series go up and down completely randomly.

Pair Corralation between ProShares Ultra and ETF Series

Considering the 90-day investment horizon ProShares Ultra is expected to generate 22.77 times less return on investment than ETF Series. In addition to that, ProShares Ultra is 1.32 times more volatile than ETF Series Solutions. It trades about 0.0 of its total potential returns per unit of risk. ETF Series Solutions is currently generating about 0.12 per unit of volatility. If you would invest  2,125  in ETF Series Solutions on August 31, 2024 and sell it today you would earn a total of  991.00  from holding ETF Series Solutions or generate 46.64% 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.  ETF Series Solutions

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.

ETF Series Solutions

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ETF Series Solutions are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak primary indicators, ETF Series may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with ProShares Ultra and ETF Series

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

The idea behind ProShares Ultra Euro and ETF Series Solutions 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.