Correlation Between ProShares Ultra and American Customer

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

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

Diversification Opportunities for ProShares Ultra and American Customer

-0.81

Correlation Coefficient

ProShares Ultra  American Customer

Pay attention - limited upside

The 3 months correlation between ProShares and American is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Yen and American Customer Satisfaction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Customer 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 Yen are associated (or correlated) with American Customer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Customer has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and American Customer go up and down completely randomly.

Pair Corralation between ProShares Ultra and American Customer

Considering the 90-day investment horizon ProShares Ultra Yen is expected to under-perform the American Customer. In addition to that, ProShares Ultra is 2.1 times more volatile than American Customer Satisfaction. It trades about -0.08 of its total potential returns per unit of risk. American Customer Satisfaction is currently generating about 0.18 per unit of volatility. If you would invest  5,715  in American Customer Satisfaction on August 30, 2024 and sell it today you would earn a total of  502.00  from holding American Customer Satisfaction or generate 8.78% return on investment over 90 days.

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

ProShares Ultra Yen  vs.  American Customer Satisfaction

ProShares Ultra Yen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ProShares Ultra Yen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Etf's fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the ETF venture institutional investors.

American Customer

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in American Customer Satisfaction are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, American Customer may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with ProShares Ultra and American Customer

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

The idea behind ProShares Ultra Yen and American Customer Satisfaction 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.