Correlation Between IShares Core and ProShares Short
Can any of the company-specific risk be diversified away by investing in both IShares Core and ProShares Short 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 IShares Core and ProShares Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core SP and ProShares Short SP500, you can compare the effects of market volatilities on IShares Core and ProShares Short 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 IShares Core with a short position of ProShares Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and ProShares Short.
Diversification Opportunities for IShares Core and ProShares Short
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IShares and ProShares is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and ProShares Short SP500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Short SP500 and IShares Core 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 iShares Core SP are associated (or correlated) with ProShares Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Short SP500 has no effect on the direction of IShares Core i.e., IShares Core and ProShares Short go up and down completely randomly.
Pair Corralation between IShares Core and ProShares Short
Considering the 90-day investment horizon iShares Core SP is expected to under-perform the ProShares Short. In addition to that, IShares Core is 1.32 times more volatile than ProShares Short SP500. It trades about -0.24 of its total potential returns per unit of risk. ProShares Short SP500 is currently generating about 0.32 per unit of volatility. If you would invest 1,190 in ProShares Short SP500 on January 20, 2024 and sell it today you would earn a total of 54.00 from holding ProShares Short SP500 or generate 4.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 91.3% |
| Values | Daily Returns |
iShares Core SP vs. ProShares Short SP500
Performance |
| Timeline |
| iShares Core SP |
| ProShares Short SP500 |
IShares Core and ProShares Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and ProShares Short
The main advantage of trading using opposite IShares Core and ProShares Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, ProShares Short 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 Short will offset losses from the drop in ProShares Short's long position.| IShares Core vs. Vanguard Small Cap Index | IShares Core vs. Vanguard Large Cap Index | IShares Core vs. Vanguard Small Cap Growth | IShares Core vs. Vanguard Small Cap Value |
| ProShares Short vs. ProShares Ultra SP500 | ProShares Short vs. HUMANA INC | ProShares Short vs. Aquagold International | ProShares Short vs. Thrivent High Yield |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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