Correlation Between ProShares UltraPro and Blackrock

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

By analyzing existing cross correlation between ProShares UltraPro SP500 and Blackrock, you can compare the effects of market volatilities on ProShares UltraPro and Blackrock 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 UltraPro with a short position of Blackrock. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraPro and Blackrock.

Diversification Opportunities for ProShares UltraPro and Blackrock

0.0

Correlation Coefficient

ProShares UltraPro  Blackrock

Pay attention - limited upside

The 3 months correlation between ProShares and Blackrock is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraPro SP500 and Blackrock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock and ProShares UltraPro 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 UltraPro SP500 are associated (or correlated) with Blackrock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock has no effect on the direction of ProShares UltraPro i.e., ProShares UltraPro and Blackrock go up and down completely randomly.

Pair Corralation between ProShares UltraPro and Blackrock

If you would invest  4,975  in ProShares UltraPro SP500 on September 5, 2024 and sell it today you would earn a total of  4,792  from holding ProShares UltraPro SP500 or generate 96.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

ProShares UltraPro SP500  vs.  Blackrock

ProShares UltraPro SP500

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares UltraPro SP500 are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, ProShares UltraPro displayed solid returns over the last few months and may actually be approaching a breakup point.

Blackrock

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackrock has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Blackrock is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with ProShares UltraPro and Blackrock

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

The idea behind ProShares UltraPro SP500 and Blackrock 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.