Correlation Between Fidelity Low and ProShares UltraShort
Can any of the company-specific risk be diversified away by investing in both Fidelity Low 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 Fidelity Low and ProShares UltraShort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Low Volatility and ProShares UltraShort SP500, you can compare the effects of market volatilities on Fidelity Low 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 Fidelity Low with a short position of ProShares UltraShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Low and ProShares UltraShort.
Diversification Opportunities for Fidelity Low and ProShares UltraShort
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fidelity and ProShares is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Low Volatility and ProShares UltraShort SP500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort and Fidelity Low 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 Fidelity Low Volatility 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 Fidelity Low i.e., Fidelity Low and ProShares UltraShort go up and down completely randomly.
Pair Corralation between Fidelity Low and ProShares UltraShort
Given the investment horizon of 90 days Fidelity Low Volatility is expected to under-perform the ProShares UltraShort. But the etf apears to be less risky and, when comparing its historical volatility, Fidelity Low Volatility is 2.87 times less risky than ProShares UltraShort. The etf trades about -0.16 of its potential returns per unit of risk. The ProShares UltraShort SP500 is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2,525 in ProShares UltraShort SP500 on January 26, 2024 and sell it today you would earn a total of 155.00 from holding ProShares UltraShort SP500 or generate 6.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Low Volatility vs. ProShares UltraShort SP500
Performance |
| Timeline |
| Fidelity Low Volatility |
| ProShares UltraShort |
Fidelity Low and ProShares UltraShort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Low and ProShares UltraShort
The main advantage of trading using opposite Fidelity Low and ProShares UltraShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Low 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.| Fidelity Low vs. SPDR MSCI EAFE | Fidelity Low vs. SPDR MSCI Emerging | Fidelity Low vs. SPDR Russell 1000 | Fidelity Low vs. SPDR Russell 1000 |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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