Correlation Between ProShares Ultra and EA Series

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

Diversification Opportunities for ProShares Ultra and EA Series

-0.84

Correlation Coefficient

ProShares Ultra  EA Series

Pay attention - limited upside

The 3 months correlation between ProShares and STRV is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Euro and EA Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EA Series Trust 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 EA Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EA Series Trust has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and EA Series go up and down completely randomly.

Pair Corralation between ProShares Ultra and EA Series

Considering the 90-day investment horizon ProShares Ultra Euro is expected to under-perform the EA Series. In addition to that, ProShares Ultra is 1.31 times more volatile than EA Series Trust. It trades about -0.12 of its total potential returns per unit of risk. EA Series Trust is currently generating about 0.14 per unit of volatility. If you would invest  3,609  in EA Series Trust on August 30, 2024 and sell it today you would earn a total of  253.00  from holding EA Series Trust or generate 7.01% 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.  EA Series Trust

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.

EA Series Trust

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in EA Series Trust are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, EA Series may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with ProShares Ultra and EA Series

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

The idea behind ProShares Ultra Euro and EA Series 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.

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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.