Correlation Between IShares Silver and ProShares Ultra

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

Diversification Opportunities for IShares Silver and ProShares Ultra

0.99
  Correlation Coefficient

No risk reduction

The 3 months correlation between IShares and ProShares is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding IShares Silver Trust and ProShares Ultra Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Ultra Silver and IShares Silver 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 IShares Silver Trust are associated (or correlated) with ProShares Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Ultra Silver has no effect on the direction of IShares Silver i.e., IShares Silver and ProShares Ultra go up and down completely randomly.

Pair Corralation between IShares Silver and ProShares Ultra

Considering the 90-day investment horizon IShares Silver is expected to generate 1.97 times less return on investment than ProShares Ultra. But when comparing it to its historical volatility, IShares Silver Trust is 2.06 times less risky than ProShares Ultra. It trades about 0.32 of its potential returns per unit of risk. ProShares Ultra Silver is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  2,366  in ProShares Ultra Silver on December 30, 2023 and sell it today you would earn a total of  508.00  from holding ProShares Ultra Silver or generate 21.47% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

IShares Silver Trust  vs.  ProShares Ultra Silver

 Performance 
       Timeline  
IShares Silver Trust 

Risk-Adjusted Performance

5 of 100

 
Low
 
High
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in IShares Silver Trust are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable essential indicators, IShares Silver is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
ProShares Ultra Silver 

Risk-Adjusted Performance

4 of 100

 
Low
 
High
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in ProShares Ultra Silver are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, ProShares Ultra may actually be approaching a critical reversion point that can send shares even higher in April 2024.

IShares Silver and ProShares Ultra Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with IShares Silver and ProShares Ultra

The main advantage of trading using opposite IShares Silver and ProShares Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Silver position performs unexpectedly, ProShares Ultra 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 Ultra will offset losses from the drop in ProShares Ultra's long position.
The idea behind IShares Silver Trust and ProShares Ultra Silver 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.

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