Correlation Between Centennial Resource and ProShares UltraShort
Can any of the company-specific risk be diversified away by investing in both Centennial Resource 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 Centennial Resource and ProShares UltraShort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centennial Resource Development and ProShares UltraShort SP500, you can compare the effects of market volatilities on Centennial Resource 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 Centennial Resource with a short position of ProShares UltraShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centennial Resource and ProShares UltraShort.
Diversification Opportunities for Centennial Resource and ProShares UltraShort
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Centennial and ProShares is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Centennial Resource Developmen and ProShares UltraShort SP500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort and Centennial Resource 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 Centennial Resource Development 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 Centennial Resource i.e., Centennial Resource and ProShares UltraShort go up and down completely randomly.
Pair Corralation between Centennial Resource and ProShares UltraShort
If you would invest 2,530 in ProShares UltraShort SP500 on February 9, 2024 and sell it today you would earn a total of 37.00 from holding ProShares UltraShort SP500 or generate 1.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Centennial Resource Developmen vs. ProShares UltraShort SP500
Performance |
| Timeline |
| Centennial Resource |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ProShares UltraShort |
Centennial Resource and ProShares UltraShort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centennial Resource and ProShares UltraShort
The main advantage of trading using opposite Centennial Resource and ProShares UltraShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centennial Resource 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.| Centennial Resource vs. Uranium Energy Corp | Centennial Resource vs. Cedar Realty Trust | Centennial Resource vs. Harmony Gold Mining | Centennial Resource vs. BBB Foods |
| ProShares UltraShort vs. Direxion Daily Gold | ProShares UltraShort vs. Direxion Daily Junior | ProShares UltraShort vs. Direxion Daily SP |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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