Correlation Between ProShares Ultra and Impact Shares

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

Diversification Opportunities for ProShares Ultra and Impact Shares

-0.78

Correlation Coefficient

ProShares Ultra  Impact Shares

Pay attention - limited upside

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

Pair Corralation between ProShares Ultra and Impact Shares

Considering the 90-day investment horizon ProShares Ultra Yen is expected to under-perform the Impact Shares. In addition to that, ProShares Ultra is 2.34 times more volatile than Impact Shares YWCA. It trades about -0.08 of its total potential returns per unit of risk. Impact Shares YWCA is currently generating about 0.13 per unit of volatility. If you would invest  3,806  in Impact Shares YWCA on August 30, 2024 and sell it today you would earn a total of  210.00  from holding Impact Shares YWCA or generate 5.52% 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.  Impact Shares YWCA

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.

Impact Shares YWCA

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Impact Shares YWCA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy primary indicators, Impact Shares is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with ProShares Ultra and Impact Shares

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

The idea behind ProShares Ultra Yen and Impact Shares YWCA 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.