Correlation Between GM and ProShares Ultra
Can any of the company-specific risk be diversified away by investing in both GM and ProShares Ultra 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 GM and ProShares Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and ProShares Ultra Bloomberg, you can compare the effects of market volatilities on GM and ProShares Ultra 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 GM with a short position of ProShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and ProShares Ultra.
Diversification Opportunities for GM and ProShares Ultra
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and ProShares is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and ProShares Ultra Bloomberg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Ultra Bloomberg and GM 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 General Motors are associated (or correlated) with ProShares Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Ultra Bloomberg has no effect on the direction of GM i.e., GM and ProShares Ultra go up and down completely randomly.
Pair Corralation between GM and ProShares Ultra
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.31 times more return on investment than ProShares Ultra. However, General Motors is 3.2 times less risky than ProShares Ultra. It trades about 0.15 of its potential returns per unit of risk. ProShares Ultra Bloomberg is currently generating about -0.08 per unit of risk. If you would invest 4,082 in General Motors on January 17, 2024 and sell it today you would earn a total of 187.00 from holding General Motors or generate 4.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. ProShares Ultra Bloomberg
Performance |
| Timeline |
| General Motors |
| ProShares Ultra Bloomberg |
GM and ProShares Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and ProShares Ultra
The main advantage of trading using opposite GM and ProShares Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, ProShares Ultra 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 Ultra will offset losses from the drop in ProShares Ultra's long position.| GM vs. Hycroft Mining Holding | GM vs. Exela Technologies | GM vs. Aquagold International | GM vs. Thrivent High Yield |
| ProShares Ultra vs. Drum Income Plus | ProShares Ultra vs. EA Series Trust | ProShares Ultra vs. Global X MLP | ProShares Ultra vs. ETRACS Quarterly Pay |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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