Correlation Between ProShares and SPDR SP
Can any of the company-specific risk be diversified away by investing in both ProShares and SPDR SP 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 ProShares and SPDR SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares SP 500 and SPDR SP 500, you can compare the effects of market volatilities on ProShares and SPDR SP 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 ProShares with a short position of SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares and SPDR SP.
Diversification Opportunities for ProShares and SPDR SP
Almost no diversification
The 3 months correlation between ProShares and SPDR is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding ProShares SP 500 and SPDR SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP 500 and ProShares 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 ProShares SP 500 are associated (or correlated) with SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP 500 has no effect on the direction of ProShares i.e., ProShares and SPDR SP go up and down completely randomly.
Pair Corralation between ProShares and SPDR SP
Given the investment horizon of 90 days ProShares is expected to generate 2.07 times less return on investment than SPDR SP. But when comparing it to its historical volatility, ProShares SP 500 is 1.13 times less risky than SPDR SP. It trades about 0.02 of its potential returns per unit of risk. SPDR SP 500 is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 40,176 in SPDR SP 500 on January 20, 2024 and sell it today you would earn a total of 9,776 from holding SPDR SP 500 or generate 24.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
ProShares SP 500 vs. SPDR SP 500
Performance |
| Timeline |
| ProShares SP 500 |
| SPDR SP 500 |
ProShares and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares and SPDR SP
The main advantage of trading using opposite ProShares and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares position performs unexpectedly, SPDR SP 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 SPDR SP will offset losses from the drop in SPDR SP's long position.| ProShares vs. iShares Core Dividend | ProShares vs. SPDR SP Dividend | ProShares vs. Invesco SP 500 | ProShares vs. Vanguard Dividend Appreciation |
| SPDR SP vs. Dimensional Targeted Value | SPDR SP vs. Dimensional World ex | SPDR SP vs. Dimensional Small Cap |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |