Correlation Between Siren Nasdaq and ProShares UltraShort
Can any of the company-specific risk be diversified away by investing in both Siren Nasdaq 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 Siren Nasdaq and ProShares UltraShort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siren Nasdaq NexGen and ProShares UltraShort SmallCap600, you can compare the effects of market volatilities on Siren Nasdaq 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 Siren Nasdaq with a short position of ProShares UltraShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siren Nasdaq and ProShares UltraShort.
Diversification Opportunities for Siren Nasdaq and ProShares UltraShort
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Siren and ProShares is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Siren Nasdaq NexGen and ProShares UltraShort SmallCap6 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort and Siren Nasdaq 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 Siren Nasdaq NexGen 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 Siren Nasdaq i.e., Siren Nasdaq and ProShares UltraShort go up and down completely randomly.
Pair Corralation between Siren Nasdaq and ProShares UltraShort
Given the investment horizon of 90 days Siren Nasdaq NexGen is expected to generate 0.86 times more return on investment than ProShares UltraShort. However, Siren Nasdaq NexGen is 1.17 times less risky than ProShares UltraShort. It trades about 0.06 of its potential returns per unit of risk. ProShares UltraShort SmallCap600 is currently generating about 0.02 per unit of risk. If you would invest 2,326 in Siren Nasdaq NexGen on January 26, 2024 and sell it today you would earn a total of 170.00 from holding Siren Nasdaq NexGen or generate 7.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
Siren Nasdaq NexGen vs. ProShares UltraShort SmallCap6
Performance |
| Timeline |
| Siren Nasdaq NexGen |
| ProShares UltraShort |
Siren Nasdaq and ProShares UltraShort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siren Nasdaq and ProShares UltraShort
The main advantage of trading using opposite Siren Nasdaq and ProShares UltraShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siren Nasdaq 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.| Siren Nasdaq vs. Amplify Transformational Data | Siren Nasdaq vs. First Trust Indxx | Siren Nasdaq vs. Capital Link Global | Siren Nasdaq vs. Global X Robotics |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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