Correlation Between ProShares Ultra and Series Portfolios

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

Diversification Opportunities for ProShares Ultra and Series Portfolios

-0.78

Correlation Coefficient

ProShares Ultra  Series Portfolios

Pay attention - limited upside

The 3 months correlation between ProShares and Series is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Yen and Series Portfolios Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Series Portfolios 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 Yen are associated (or correlated) with Series Portfolios. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Series Portfolios Trust has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Series Portfolios go up and down completely randomly.

Pair Corralation between ProShares Ultra and Series Portfolios

Considering the 90-day investment horizon ProShares Ultra Yen is expected to under-perform the Series Portfolios. In addition to that, ProShares Ultra is 1.37 times more volatile than Series Portfolios Trust. It trades about -0.06 of its total potential returns per unit of risk. Series Portfolios Trust is currently generating about 0.26 per unit of volatility. If you would invest  3,146  in Series Portfolios Trust on September 2, 2024 and sell it today you would earn a total of  652.00  from holding Series Portfolios Trust or generate 20.72% return on investment over 90 days.

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

ProShares Ultra Yen  vs.  Series Portfolios Trust

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 quite persistent fundamental indicators, ProShares Ultra is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Series Portfolios Trust

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Series Portfolios Trust are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Series Portfolios showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ProShares Ultra and Series Portfolios

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

The idea behind ProShares Ultra Yen and Series Portfolios 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.