Correlation Between AMREP and ProShares UltraShort
Can any of the company-specific risk be diversified away by investing in both AMREP and ProShares UltraShort 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 AMREP and ProShares UltraShort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMREP and ProShares UltraShort Bloomberg, you can compare the effects of market volatilities on AMREP and ProShares UltraShort 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 AMREP with a short position of ProShares UltraShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMREP and ProShares UltraShort.
Diversification Opportunities for AMREP and ProShares UltraShort
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AMREP and ProShares is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding AMREP and ProShares UltraShort Bloomberg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort and AMREP 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 AMREP are associated (or correlated) with ProShares UltraShort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares UltraShort has no effect on the direction of AMREP i.e., AMREP and ProShares UltraShort go up and down completely randomly.
Pair Corralation between AMREP and ProShares UltraShort
Considering the 90-day investment horizon AMREP is expected to under-perform the ProShares UltraShort. In addition to that, AMREP is 2.6 times more volatile than ProShares UltraShort Bloomberg. It trades about -0.19 of its total potential returns per unit of risk. ProShares UltraShort Bloomberg is currently generating about -0.29 per unit of volatility. If you would invest 1,619 in ProShares UltraShort Bloomberg on January 17, 2024 and sell it today you would lose (125.00) from holding ProShares UltraShort Bloomberg or give up 7.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
AMREP vs. ProShares UltraShort Bloomberg
Performance |
| Timeline |
| AMREP |
| ProShares UltraShort |
AMREP and ProShares UltraShort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMREP and ProShares UltraShort
The main advantage of trading using opposite AMREP and ProShares UltraShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMREP position performs unexpectedly, ProShares UltraShort 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 ProShares UltraShort will offset losses from the drop in ProShares UltraShort's long position.| AMREP vs. Quanex Building Products | AMREP vs. Janus International Group | AMREP vs. Apogee Enterprises | AMREP vs. Gibraltar Industries |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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