Correlation Between ProShares and VanEck Inflation
Can any of the company-specific risk be diversified away by investing in both ProShares and VanEck Inflation 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 VanEck Inflation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares K 1 Free and VanEck Inflation Allocation, you can compare the effects of market volatilities on ProShares and VanEck Inflation 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 VanEck Inflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares and VanEck Inflation.
Diversification Opportunities for ProShares and VanEck Inflation
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ProShares and VanEck is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding ProShares K 1 Free and VanEck Inflation Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Inflation All 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 K 1 Free are associated (or correlated) with VanEck Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Inflation All has no effect on the direction of ProShares i.e., ProShares and VanEck Inflation go up and down completely randomly.
Pair Corralation between ProShares and VanEck Inflation
Given the investment horizon of 90 days ProShares is expected to generate 3.67 times less return on investment than VanEck Inflation. But when comparing it to its historical volatility, ProShares K 1 Free is 1.11 times less risky than VanEck Inflation. It trades about 0.05 of its potential returns per unit of risk. VanEck Inflation Allocation is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,645 in VanEck Inflation Allocation on January 24, 2024 and sell it today you would earn a total of 85.00 from holding VanEck Inflation Allocation or generate 3.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares K 1 Free vs. VanEck Inflation Allocation
Performance |
| Timeline |
| ProShares K 1 |
| VanEck Inflation All |
ProShares and VanEck Inflation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares and VanEck Inflation
The main advantage of trading using opposite ProShares and VanEck Inflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares position performs unexpectedly, VanEck Inflation 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 VanEck Inflation will offset losses from the drop in VanEck Inflation's long position.| ProShares vs. United States 12 | ProShares vs. Credit Suisse X Links | ProShares vs. Invesco DB Oil | ProShares vs. United States 12 |
| VanEck Inflation vs. Tidal Trust II | VanEck Inflation vs. ProShares VIX Mid Term | VanEck Inflation vs. ProShares VIX Short Term | VanEck Inflation vs. LHA Market State |
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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