Correlation Between Twitter and ProShares UltraShort
Can any of the company-specific risk be diversified away by investing in both Twitter 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 Twitter and ProShares UltraShort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Twitter and ProShares UltraShort SmallCap600, you can compare the effects of market volatilities on Twitter 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 Twitter with a short position of ProShares UltraShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Twitter and ProShares UltraShort.
Diversification Opportunities for Twitter and ProShares UltraShort
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Twitter and ProShares is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Twitter and ProShares UltraShort SmallCap6 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort and Twitter 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 Twitter 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 Twitter i.e., Twitter and ProShares UltraShort go up and down completely randomly.
Pair Corralation between Twitter and ProShares UltraShort
If you would invest 1,869 in ProShares UltraShort SmallCap600 on January 26, 2024 and sell it today you would earn a total of 59.00 from holding ProShares UltraShort SmallCap600 or generate 3.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Twitter vs. ProShares UltraShort SmallCap6
Performance |
| Timeline |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ProShares UltraShort |
Twitter and ProShares UltraShort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Twitter and ProShares UltraShort
The main advantage of trading using opposite Twitter and ProShares UltraShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Twitter 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.| Twitter vs. Mid Atlantic Home Health | Twitter vs. Planet Fitness | Twitter vs. JBG SMITH Properties | Twitter vs. Bassett Furniture Industries |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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