Correlation Between Vanguard Health and ProShares UltraShort
Can any of the company-specific risk be diversified away by investing in both Vanguard Health 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 Vanguard Health and ProShares UltraShort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Health Care and ProShares UltraShort SP500, you can compare the effects of market volatilities on Vanguard Health 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 Vanguard Health with a short position of ProShares UltraShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Health and ProShares UltraShort.
Diversification Opportunities for Vanguard Health and ProShares UltraShort
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vanguard and ProShares is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Health Care and ProShares UltraShort SP500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort and Vanguard 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 Vanguard Health Care 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 Vanguard Health i.e., Vanguard Health and ProShares UltraShort go up and down completely randomly.
Pair Corralation between Vanguard Health and ProShares UltraShort
Considering the 90-day investment horizon Vanguard Health Care is expected to under-perform the ProShares UltraShort. But the etf apears to be less risky and, when comparing its historical volatility, Vanguard Health Care is 1.77 times less risky than ProShares UltraShort. The etf trades about -0.32 of its potential returns per unit of risk. The ProShares UltraShort SP500 is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 2,502 in ProShares UltraShort SP500 on January 20, 2024 and sell it today you would earn a total of 288.00 from holding ProShares UltraShort SP500 or generate 11.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Health Care vs. ProShares UltraShort SP500
Performance |
| Timeline |
| Vanguard Health Care |
| ProShares UltraShort |
Vanguard Health and ProShares UltraShort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Health and ProShares UltraShort
The main advantage of trading using opposite Vanguard Health and ProShares UltraShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Health 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.| Vanguard Health vs. Vanguard Consumer Staples | Vanguard Health vs. Vanguard Financials Index | Vanguard Health vs. Vanguard Information Technology | Vanguard Health vs. Vanguard Consumer Discretionary |
| 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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