Correlation Between Mangalam Cement and ProShares Ultra

Can any of the company-specific risk be diversified away by investing in both Mangalam Cement 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 Mangalam Cement and ProShares Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mangalam Cement Limited and ProShares Ultra Bloomberg, you can compare the effects of market volatilities on Mangalam Cement 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 Mangalam Cement with a short position of ProShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mangalam Cement and ProShares Ultra.

Diversification Opportunities for Mangalam Cement and ProShares Ultra

0.1

Correlation Coefficient

Mangalam Cement  ProShares Ultra

Average diversification

The 3 months correlation between Mangalam and ProShares is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Mangalam Cement Limited 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 Mangalam Cement 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 Mangalam Cement Limited 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 Mangalam Cement i.e., Mangalam Cement and ProShares Ultra go up and down completely randomly.

Pair Corralation between Mangalam Cement and ProShares Ultra

Assuming the 90 days trading horizon Mangalam Cement Limited is expected to generate 0.61 times more return on investment than ProShares Ultra. However, Mangalam Cement Limited is 1.65 times less risky than ProShares Ultra. It trades about 0.37 of its potential returns per unit of risk. ProShares Ultra Bloomberg is currently generating about 0.05 per unit of risk. If you would invest  76,135  in Mangalam Cement Limited on February 6, 2024 and sell it today you would earn a total of  15,800  from holding Mangalam Cement Limited or generate 20.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	85.71%
Values	Daily Returns

Mangalam Cement Limited  vs.  ProShares Ultra Bloomberg

Mangalam Cement

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mangalam Cement Limited are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak essential indicators, Mangalam Cement exhibited solid returns over the last few months and may actually be approaching a breakup point.

ProShares Ultra Bloomberg

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ProShares Ultra Bloomberg has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Etf's forward indicators remain quite persistent which may send shares a bit higher in June 2024. The latest mess may also be a sign of long-standing up-swing for the ETF venture institutional investors.

Pair Trading with Mangalam Cement and ProShares Ultra

The main advantage of trading using opposite Mangalam Cement and ProShares Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mangalam Cement 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.

The idea behind Mangalam Cement Limited and ProShares Ultra Bloomberg pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.