Correlation Between ProShares Ultra and Doubleline Opportunistic

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

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

Diversification Opportunities for ProShares Ultra and Doubleline Opportunistic

-0.72

Correlation Coefficient

ProShares Ultra  Doubleline Opportunistic

Pay attention - limited upside

The 3 months correlation between ProShares and Doubleline is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Semiconductors and Doubleline Opportunistic Credi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doubleline Opportunistic 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 Semiconductors are associated (or correlated) with Doubleline Opportunistic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doubleline Opportunistic has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Doubleline Opportunistic go up and down completely randomly.

Pair Corralation between ProShares Ultra and Doubleline Opportunistic

Considering the 90-day investment horizon ProShares Ultra Semiconductors is expected to generate 9.32 times more return on investment than Doubleline Opportunistic. However, ProShares Ultra is 9.32 times more volatile than Doubleline Opportunistic Credit. It trades about 0.11 of its potential returns per unit of risk. Doubleline Opportunistic Credit is currently generating about -0.01 per unit of risk. If you would invest  4,938  in ProShares Ultra Semiconductors on September 2, 2024 and sell it today you would earn a total of  1,362  from holding ProShares Ultra Semiconductors or generate 27.58% return on investment over 90 days.

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

ProShares Ultra Semiconductors  vs.  Doubleline Opportunistic Credi

ProShares Ultra Semi

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares Ultra Semiconductors are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, ProShares Ultra exhibited solid returns over the last few months and may actually be approaching a breakup point.

Doubleline Opportunistic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Doubleline Opportunistic Credit has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, Doubleline Opportunistic is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with ProShares Ultra and Doubleline Opportunistic

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

The idea behind ProShares Ultra Semiconductors and Doubleline Opportunistic Credit 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.