Correlation Between MRRL and ProShares Ultra

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Can any of the company-specific risk be diversified away by investing in both MRRL 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 MRRL and ProShares Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MRRL and ProShares Ultra Bloomberg, you can compare the effects of market volatilities on MRRL 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 MRRL with a short position of ProShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of MRRL and ProShares Ultra.

Diversification Opportunities for MRRL and ProShares Ultra

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between MRRL and ProShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MRRL 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 MRRL 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 MRRL 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 MRRL i.e., MRRL and ProShares Ultra go up and down completely randomly.

Pair Corralation between MRRL and ProShares Ultra

If you would invest (100.00) in MRRL on January 24, 2024 and sell it today you would earn a total of  100.00  from holding MRRL or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

MRRL  vs.  ProShares Ultra Bloomberg

 Performance 
       Timeline  
MRRL 

Risk-Adjusted Performance

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Over the last 90 days MRRL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, MRRL is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.
ProShares Ultra Bloomberg 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days ProShares Ultra Bloomberg has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Etf's forward indicators remain quite persistent which may send shares a bit higher in May 2024. The latest mess may also be a sign of long-standing up-swing for the ETF venture institutional investors.

MRRL and ProShares Ultra Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with MRRL and ProShares Ultra

The main advantage of trading using opposite MRRL and ProShares Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MRRL 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.
The idea behind MRRL and ProShares Ultra Bloomberg pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.

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