Correlation Between TC Energy and ProShares UltraShort
Can any of the company-specific risk be diversified away by investing in both TC Energy and ProShares UltraShort 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 TC Energy and ProShares UltraShort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TC Energy Corp and ProShares UltraShort SP500, you can compare the effects of market volatilities on TC Energy and ProShares UltraShort 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 TC Energy with a short position of ProShares UltraShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of TC Energy and ProShares UltraShort.
Diversification Opportunities for TC Energy and ProShares UltraShort
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TRP and ProShares is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding TC Energy Corp and ProShares UltraShort SP500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort and TC Energy 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 TC Energy Corp are associated (or correlated) with ProShares UltraShort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares UltraShort has no effect on the direction of TC Energy i.e., TC Energy and ProShares UltraShort go up and down completely randomly.
Pair Corralation between TC Energy and ProShares UltraShort
Assuming the 90 days trading horizon TC Energy Corp is expected to generate 0.6 times more return on investment than ProShares UltraShort. However, TC Energy Corp is 1.67 times less risky than ProShares UltraShort. It trades about -0.02 of its potential returns per unit of risk. ProShares UltraShort SP500 is currently generating about -0.03 per unit of risk. If you would invest 5,938 in TC Energy Corp on January 19, 2024 and sell it today you would lose (1,107) from holding TC Energy Corp or give up 18.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
TC Energy Corp vs. ProShares UltraShort SP500
Performance |
| Timeline |
| TC Energy Corp |
| ProShares UltraShort |
TC Energy and ProShares UltraShort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TC Energy and ProShares UltraShort
The main advantage of trading using opposite TC Energy and ProShares UltraShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TC Energy position performs unexpectedly, ProShares UltraShort 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 UltraShort will offset losses from the drop in ProShares UltraShort's long position.| TC Energy vs. Enbridge | TC Energy vs. BCE Inc | TC Energy vs. Fortis Inc | TC Energy vs. Pembina Pipeline Corp |
| ProShares UltraShort vs. ProShares Ultra SP500 | ProShares UltraShort vs. HUMANA INC | ProShares UltraShort vs. Aquagold International | ProShares UltraShort vs. Thrivent High Yield |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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