Correlation Between Meta Platforms and ProShares UltraShort
Can any of the company-specific risk be diversified away by investing in both Meta Platforms 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 Meta Platforms and ProShares UltraShort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meta Platforms and ProShares UltraShort Bloomberg, you can compare the effects of market volatilities on Meta Platforms 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 Meta Platforms with a short position of ProShares UltraShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meta Platforms and ProShares UltraShort.
Diversification Opportunities for Meta Platforms and ProShares UltraShort
0.53 | Correlation Coefficient |
Very weak diversification
The 23 months correlation between Meta and ProShares is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Meta Platforms and ProShares UltraShort Bloomberg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort and Meta Platforms 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 Meta Platforms 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 Meta Platforms i.e., Meta Platforms and ProShares UltraShort go up and down completely randomly.
Pair Corralation between Meta Platforms and ProShares UltraShort
If you would invest 3,260 in ProShares UltraShort Bloomberg on January 19, 2024 and sell it today you would earn a total of 4,060 from holding ProShares UltraShort Bloomberg or generate 124.54% return on investment over 90 days.
Time Period | 23 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 0.44% |
Values | Daily Returns |
Meta Platforms vs. ProShares UltraShort Bloomberg
Performance |
Timeline |
Meta Platforms |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ProShares UltraShort |
Meta Platforms and ProShares UltraShort Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Meta Platforms and ProShares UltraShort
The main advantage of trading using opposite Meta Platforms and ProShares UltraShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meta Platforms 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.Meta Platforms vs. Meta Platforms | Meta Platforms vs. Alphabet Inc Class A | Meta Platforms vs. Twilio Inc | Meta Platforms vs. Snap Inc |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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