Correlation Between Exxon and ProShares Ultra
Can any of the company-specific risk be diversified away by investing in both Exxon 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 Exxon and ProShares Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exxon Mobil Corp and ProShares Ultra Silver, you can compare the effects of market volatilities on Exxon 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 Exxon with a short position of ProShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and ProShares Ultra.
Diversification Opportunities for Exxon and ProShares Ultra
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Exxon and ProShares is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and ProShares Ultra Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Ultra Silver and Exxon 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 Exxon Mobil Corp 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 Silver has no effect on the direction of Exxon i.e., Exxon and ProShares Ultra go up and down completely randomly.
Pair Corralation between Exxon and ProShares Ultra
Considering the 90-day investment horizon Exxon Mobil Corp is expected to under-perform the ProShares Ultra. But the stock apears to be less risky and, when comparing its historical volatility, Exxon Mobil Corp is 3.91 times less risky than ProShares Ultra. The stock trades about -0.17 of its potential returns per unit of risk. The ProShares Ultra Silver is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 3,566 in ProShares Ultra Silver on February 8, 2024 and sell it today you would lose (137.00) from holding ProShares Ultra Silver or give up 3.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exxon Mobil Corp vs. ProShares Ultra Silver
Performance |
| Timeline |
| Exxon Mobil Corp |
| ProShares Ultra Silver |
Exxon and ProShares Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and ProShares Ultra
The main advantage of trading using opposite Exxon and ProShares Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon 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.| Exxon vs. Shell PLC ADR | Exxon vs. BP PLC ADR | Exxon vs. Suncor Energy | Exxon vs. Petroleo Brasileiro Petrobras |
| ProShares Ultra vs. ProShares Ultra Gold | ProShares Ultra vs. ProShares UltraShort Silver | ProShares Ultra vs. DB Gold Double | ProShares Ultra vs. ProShares UltraShort Gold |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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