Correlation Between ProShares Ultra and VelocityShares
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and VelocityShares 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 Ultra and VelocityShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Ultra VIX and VelocityShares, you can compare the effects of market volatilities on ProShares Ultra and VelocityShares 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 Ultra with a short position of VelocityShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and VelocityShares.
Diversification Opportunities for ProShares Ultra and VelocityShares
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and VelocityShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra VIX and VelocityShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VelocityShares and ProShares Ultra 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 Ultra VIX are associated (or correlated) with VelocityShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VelocityShares has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and VelocityShares go up and down completely randomly.
Pair Corralation between ProShares Ultra and VelocityShares
If you would invest 3,140 in ProShares Ultra VIX on January 26, 2024 and sell it today you would earn a total of 189.00 from holding ProShares Ultra VIX or generate 6.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
ProShares Ultra VIX vs. VelocityShares
Performance |
| Timeline |
| ProShares Ultra VIX |
| VelocityShares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ProShares Ultra and VelocityShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and VelocityShares
The main advantage of trading using opposite ProShares Ultra and VelocityShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, VelocityShares 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 VelocityShares will offset losses from the drop in VelocityShares' long position.| ProShares Ultra vs. Innovator Equity Accelerated | ProShares Ultra vs. Innovator Equity Accelerated | ProShares Ultra vs. Innovator Growth 100 Accelerated | ProShares Ultra vs. Innovator Equity Accelerated |
| VelocityShares vs. MicroSectors Big Oil | VelocityShares vs. ProShares Ultra Oil | VelocityShares vs. Direxion Daily SP | VelocityShares vs. Invesco Dynamic Energy |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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