Correlation Between ProShares UltraPro and SPDR DoubleLine
Can any of the company-specific risk be diversified away by investing in both ProShares UltraPro and SPDR DoubleLine 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 UltraPro and SPDR DoubleLine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares UltraPro QQQ and SPDR DoubleLine Short, you can compare the effects of market volatilities on ProShares UltraPro and SPDR DoubleLine 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 UltraPro with a short position of SPDR DoubleLine. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraPro and SPDR DoubleLine.
Diversification Opportunities for ProShares UltraPro and SPDR DoubleLine
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ProShares and SPDR is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraPro QQQ and SPDR DoubleLine Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR DoubleLine Short and ProShares UltraPro 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 UltraPro QQQ are associated (or correlated) with SPDR DoubleLine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR DoubleLine Short has no effect on the direction of ProShares UltraPro i.e., ProShares UltraPro and SPDR DoubleLine go up and down completely randomly.
Pair Corralation between ProShares UltraPro and SPDR DoubleLine
Given the investment horizon of 90 days ProShares UltraPro QQQ is expected to under-perform the SPDR DoubleLine. In addition to that, ProShares UltraPro is 36.01 times more volatile than SPDR DoubleLine Short. It trades about -0.19 of its total potential returns per unit of risk. SPDR DoubleLine Short is currently generating about -0.1 per unit of volatility. If you would invest 4,680 in SPDR DoubleLine Short on January 26, 2024 and sell it today you would lose (9.00) from holding SPDR DoubleLine Short or give up 0.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares UltraPro QQQ vs. SPDR DoubleLine Short
Performance |
| Timeline |
| ProShares UltraPro QQQ |
| SPDR DoubleLine Short |
ProShares UltraPro and SPDR DoubleLine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares UltraPro and SPDR DoubleLine
The main advantage of trading using opposite ProShares UltraPro and SPDR DoubleLine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraPro position performs unexpectedly, SPDR DoubleLine 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 SPDR DoubleLine will offset losses from the drop in SPDR DoubleLine's long position.| ProShares UltraPro vs. ProShares UltraPro Short | ProShares UltraPro vs. Direxion Daily Semiconductor | ProShares UltraPro vs. ProShares UltraPro SP500 | ProShares UltraPro vs. Direxion Daily SP500 |
| SPDR DoubleLine vs. SPDR DoubleLine Emerging | SPDR DoubleLine vs. SPDR SSgA Ultra | SPDR DoubleLine vs. SPDR Bloomberg 1 10 | SPDR DoubleLine vs. SPDR DoubleLine Total |
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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