Correlation Between Wave Life and ProShares Ultra
Can any of the company-specific risk be diversified away by investing in both Wave Life 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 Wave Life and ProShares Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wave Life Sciences and ProShares Ultra Bloomberg, you can compare the effects of market volatilities on Wave Life 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 Wave Life with a short position of ProShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wave Life and ProShares Ultra.
Diversification Opportunities for Wave Life and ProShares Ultra
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wave and ProShares is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Wave Life Sciences 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 Wave Life 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 Wave Life Sciences 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 Wave Life i.e., Wave Life and ProShares Ultra go up and down completely randomly.
Pair Corralation between Wave Life and ProShares Ultra
Considering the 90-day investment horizon Wave Life Sciences is expected to generate 1.23 times more return on investment than ProShares Ultra. However, Wave Life is 1.23 times more volatile than ProShares Ultra Bloomberg. It trades about 0.06 of its potential returns per unit of risk. ProShares Ultra Bloomberg is currently generating about -0.03 per unit of risk. If you would invest 460.00 in Wave Life Sciences on January 25, 2024 and sell it today you would earn a total of 41.00 from holding Wave Life Sciences or generate 8.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wave Life Sciences vs. ProShares Ultra Bloomberg
Performance |
| Timeline |
| Wave Life Sciences |
| ProShares Ultra Bloomberg |
Wave Life and ProShares Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wave Life and ProShares Ultra
The main advantage of trading using opposite Wave Life and ProShares Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wave Life 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.| Wave Life vs. Arrowhead Pharmaceuticals | Wave Life vs. CytomX Therapeutics | Wave Life vs. Assembly Biosciences | Wave Life vs. Apellis Pharmaceuticals |
| 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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