Correlation Between ProShares UltraShort and Credit Suisse
Can any of the company-specific risk be diversified away by investing in both ProShares UltraShort and Credit Suisse 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 UltraShort and Credit Suisse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares UltraShort Utilities and Credit Suisse, you can compare the effects of market volatilities on ProShares UltraShort and Credit Suisse 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 UltraShort with a short position of Credit Suisse. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraShort and Credit Suisse.
Diversification Opportunities for ProShares UltraShort and Credit Suisse
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ProShares and Credit is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraShort Utilities and Credit Suisse in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Suisse and ProShares UltraShort 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 UltraShort Utilities are associated (or correlated) with Credit Suisse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Suisse has no effect on the direction of ProShares UltraShort i.e., ProShares UltraShort and Credit Suisse go up and down completely randomly.
Pair Corralation between ProShares UltraShort and Credit Suisse
If you would invest 1,244 in ProShares UltraShort Utilities on January 18, 2024 and sell it today you would earn a total of 18.00 from holding ProShares UltraShort Utilities or generate 1.45% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 4.55% |
Values | Daily Returns |
ProShares UltraShort Utilities vs. Credit Suisse
Performance |
Timeline |
ProShares UltraShort |
Credit Suisse |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ProShares UltraShort and Credit Suisse Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ProShares UltraShort and Credit Suisse
The main advantage of trading using opposite ProShares UltraShort and Credit Suisse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraShort position performs unexpectedly, Credit Suisse 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 Credit Suisse will offset losses from the drop in Credit Suisse's long position.The idea behind ProShares UltraShort Utilities and Credit Suisse 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.
Credit Suisse vs. UBS AG London | Credit Suisse vs. UBS AG London | Credit Suisse vs. Barclays ETN Select | Credit Suisse vs. Tortoise North American |
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 Stocks Directory module to find actively traded stocks across global markets.
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