Correlation Between ProShares Ultra and Harbor Long

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

Diversification Opportunities for ProShares Ultra and Harbor Long

-0.53

Correlation Coefficient

ProShares Ultra  Harbor Long

Excellent diversification

The 3 months correlation between ProShares and Harbor is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Yen and Harbor Long Term Growers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor Long Term 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 Harbor Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor Long Term has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Harbor Long go up and down completely randomly.

Pair Corralation between ProShares Ultra and Harbor Long

Considering the 90-day investment horizon ProShares Ultra Yen is expected to under-perform the Harbor Long. In addition to that, ProShares Ultra is 1.52 times more volatile than Harbor Long Term Growers. It trades about -0.19 of its total potential returns per unit of risk. Harbor Long Term Growers is currently generating about 0.12 per unit of volatility. If you would invest  2,554  in Harbor Long Term Growers on September 22, 2024 and sell it today you would earn a total of  204.00  from holding Harbor Long Term Growers or generate 7.99% return on investment over 90 days.

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

ProShares Ultra Yen  vs.  Harbor Long Term Growers

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 weak performance in the last few months, the Etf's fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the ETF venture institutional investors.

Harbor Long Term

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Harbor Long Term Growers are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Harbor Long may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with ProShares Ultra and Harbor Long

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

The idea behind ProShares Ultra Yen and Harbor Long Term Growers 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.