Correlation Between ProShares Ultra and ATT
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and ATT 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 ATT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Ultra Bloomberg and ATT Inc, you can compare the effects of market volatilities on ProShares Ultra and ATT 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 ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and ATT.
Diversification Opportunities for ProShares Ultra and ATT
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ProShares and ATT is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Bloomberg and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc 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 Bloomberg are associated (or correlated) with ATT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT Inc has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and ATT go up and down completely randomly.
Pair Corralation between ProShares Ultra and ATT
Given the investment horizon of 90 days ProShares Ultra Bloomberg is expected to generate 5.15 times more return on investment than ATT. However, ProShares Ultra is 5.15 times more volatile than ATT Inc. It trades about 0.06 of its potential returns per unit of risk. ATT Inc is currently generating about -0.16 per unit of risk. If you would invest 1,372 in ProShares Ultra Bloomberg on January 24, 2024 and sell it today you would earn a total of 50.00 from holding ProShares Ultra Bloomberg or generate 3.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
ProShares Ultra Bloomberg vs. ATT Inc
Performance |
Timeline |
ProShares Ultra Bloomberg |
ATT Inc |
ProShares Ultra and ATT Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ProShares Ultra and ATT
The main advantage of trading using opposite ProShares Ultra and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, ATT 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 ATT will offset losses from the drop in ATT's long position.ProShares Ultra vs. ProShares UltraShort Silver | ProShares Ultra vs. ProShares UltraShort Gold | ProShares Ultra vs. VanEck Junior Gold |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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