Correlation Between ProShares Ultra and LMLP
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and LMLP 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 LMLP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Ultra Industrials and LMLP, you can compare the effects of market volatilities on ProShares Ultra and LMLP 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 LMLP. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and LMLP.
Diversification Opportunities for ProShares Ultra and LMLP
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and LMLP is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Industrials and LMLP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LMLP 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 Industrials are associated (or correlated) with LMLP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LMLP has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and LMLP go up and down completely randomly.
Pair Corralation between ProShares Ultra and LMLP
If you would invest 0.00 in LMLP on January 25, 2024 and sell it today you would earn a total of 0.00 from holding LMLP or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 4.76% |
Values | Daily Returns |
ProShares Ultra Industrials vs. LMLP
Performance |
Timeline |
ProShares Ultra Indu |
LMLP |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ProShares Ultra and LMLP Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ProShares Ultra and LMLP
The main advantage of trading using opposite ProShares Ultra and LMLP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, LMLP 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 LMLP will offset losses from the drop in LMLP's long position.ProShares Ultra vs. ProShares Ultra Consumer | ProShares Ultra vs. ProShares Ultra Consumer | ProShares Ultra vs. ProShares Ultra Utilities | ProShares Ultra vs. ProShares Ultra Health |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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