Correlation Between PPLC and ProShares Short
Can any of the company-specific risk be diversified away by investing in both PPLC 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 PPLC and ProShares Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PPLC and ProShares Short SP500, you can compare the effects of market volatilities on PPLC 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 PPLC with a short position of ProShares Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPLC and ProShares Short.
Diversification Opportunities for PPLC and ProShares Short
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PPLC and ProShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PPLC 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 PPLC 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 PPLC 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 PPLC i.e., PPLC and ProShares Short go up and down completely randomly.
Pair Corralation between PPLC and ProShares Short
If you would invest 1,192 in ProShares Short SP500 on January 25, 2024 and sell it today you would earn a total of 42.00 from holding ProShares Short SP500 or generate 3.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
PPLC vs. ProShares Short SP500
Performance |
| Timeline |
| PPLC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ProShares Short SP500 |
PPLC and ProShares Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PPLC and ProShares Short
The main advantage of trading using opposite PPLC and ProShares Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPLC 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.The idea behind PPLC and ProShares Short SP500 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |