Correlation Between IBMJ and ProShares
Can any of the company-specific risk be diversified away by investing in both IBMJ and ProShares 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 IBMJ and ProShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IBMJ and ProShares, you can compare the effects of market volatilities on IBMJ and ProShares 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 IBMJ with a short position of ProShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of IBMJ and ProShares.
Diversification Opportunities for IBMJ and ProShares
Pay attention - limited upside
The 3 months correlation between IBMJ and ProShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding IBMJ and ProShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares and IBMJ 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 IBMJ are associated (or correlated) with ProShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares has no effect on the direction of IBMJ i.e., IBMJ and ProShares go up and down completely randomly.
Pair Corralation between IBMJ and ProShares
If you would invest (100.00) in ProShares on January 24, 2024 and sell it today you would earn a total of 100.00 from holding ProShares or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IBMJ vs. ProShares
Performance |
| Timeline |
| IBMJ |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ProShares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
IBMJ and ProShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IBMJ and ProShares
The main advantage of trading using opposite IBMJ and ProShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IBMJ position performs unexpectedly, ProShares 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 will offset losses from the drop in ProShares' long position.| IBMJ vs. Vanguard Total Stock | IBMJ vs. SPDR SP 500 | IBMJ vs. iShares Core SP | IBMJ vs. Vanguard Total Bond |
| ProShares vs. Vanguard Mid Cap Index | ProShares vs. iShares Core SP | ProShares vs. SPDR SP 500 | ProShares vs. Simplify Equity PLUS |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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