Correlation Between Universal Health and ProShares Ultra
Can any of the company-specific risk be diversified away by investing in both Universal Health 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 Universal Health and ProShares Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Health Services and ProShares Ultra Bloomberg, you can compare the effects of market volatilities on Universal Health 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 Universal Health with a short position of ProShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Health and ProShares Ultra.
Diversification Opportunities for Universal Health and ProShares Ultra
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Universal and ProShares is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Universal Health Services and ProShares Ultra Bloomberg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Ultra Bloomberg and Universal Health 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 Universal Health Services 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 Bloomberg has no effect on the direction of Universal Health i.e., Universal Health and ProShares Ultra go up and down completely randomly.
Pair Corralation between Universal Health and ProShares Ultra
Considering the 90-day investment horizon Universal Health Services is expected to under-perform the ProShares Ultra. But the stock apears to be less risky and, when comparing its historical volatility, Universal Health Services is 2.84 times less risky than ProShares Ultra. The stock trades about -0.18 of its potential returns per unit of risk. The ProShares Ultra Bloomberg is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,372 in ProShares Ultra Bloomberg on January 25, 2024 and sell it today you would lose (25.00) from holding ProShares Ultra Bloomberg or give up 1.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Health Services vs. ProShares Ultra Bloomberg
Performance |
| Timeline |
| Universal Health Services |
| ProShares Ultra Bloomberg |
Universal Health and ProShares Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Health and ProShares Ultra
The main advantage of trading using opposite Universal Health and ProShares Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Health 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.| Universal Health vs. The Ensign Group | Universal Health vs. Addus HomeCare | Universal Health vs. Encompass Health Corp | Universal Health vs. Surgery Partners |
| ProShares Ultra vs. ProShares Short SP500 | ProShares Ultra vs. ProShares Metaverse ETF | ProShares Ultra vs. ProShares VIX Mid Term | ProShares Ultra vs. ProShares VIX Short Term |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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