Correlation Between ProShares Short and US Global

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

Diversification Opportunities for ProShares Short and US Global

0.53
  Correlation Coefficient

Very weak diversification

The 3 months correlation between ProShares and SEA is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Short QQQ and US Global Sea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Global Sea and ProShares Short 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 Short QQQ are associated (or correlated) with US Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Global Sea has no effect on the direction of ProShares Short i.e., ProShares Short and US Global go up and down completely randomly.

Pair Corralation between ProShares Short and US Global

Considering the 90-day investment horizon ProShares Short QQQ is expected to under-perform the US Global. In addition to that, ProShares Short is 1.28 times more volatile than US Global Sea. It trades about -0.04 of its total potential returns per unit of risk. US Global Sea is currently generating about -0.03 per unit of volatility. If you would invest  1,517  in US Global Sea on December 29, 2023 and sell it today you would lose (9.00) from holding US Global Sea or give up 0.59% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy95.65%
ValuesDaily Returns

ProShares Short QQQ  vs.  US Global Sea

 Performance 
       Timeline  
ProShares Short QQQ 

Risk-Adjusted Performance

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High
Very Weak
Over the last 90 days ProShares Short QQQ has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unsteady performance, the Etf's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the ETF retail investors.
US Global Sea 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days US Global Sea has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, US Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

ProShares Short and US Global Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ProShares Short and US Global

The main advantage of trading using opposite ProShares Short and US Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Short position performs unexpectedly, US Global 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 US Global will offset losses from the drop in US Global's long position.
The idea behind ProShares Short QQQ and US Global Sea 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.
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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 Stocks Directory module to find actively traded stocks across global markets.

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