Correlation Between Vanguard Reit and ProShares UltraShort
Can any of the company-specific risk be diversified away by investing in both Vanguard Reit 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 Reit 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 Reit Index and ProShares UltraShort Nasdaq, you can compare the effects of market volatilities on Vanguard Reit 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 Reit with a short position of ProShares UltraShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Reit and ProShares UltraShort.
Diversification Opportunities for Vanguard Reit and ProShares UltraShort
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vanguard and ProShares is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Reit Index and ProShares UltraShort Nasdaq in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort and Vanguard Reit 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 Reit Index 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 Reit i.e., Vanguard Reit and ProShares UltraShort go up and down completely randomly.
Pair Corralation between Vanguard Reit and ProShares UltraShort
Assuming the 90 days horizon Vanguard Reit Index is expected to under-perform the ProShares UltraShort. But the mutual fund apears to be less risky and, when comparing its historical volatility, Vanguard Reit Index is 1.51 times less risky than ProShares UltraShort. The mutual fund trades about -0.12 of its potential returns per unit of risk. The ProShares UltraShort Nasdaq is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,794 in ProShares UltraShort Nasdaq on January 26, 2024 and sell it today you would earn a total of 215.00 from holding ProShares UltraShort Nasdaq or generate 11.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Reit Index vs. ProShares UltraShort Nasdaq
Performance |
| Timeline |
| Vanguard Reit Index |
| ProShares UltraShort |
Vanguard Reit and ProShares UltraShort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Reit and ProShares UltraShort
The main advantage of trading using opposite Vanguard Reit and ProShares UltraShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Reit 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 Reit vs. Select Fund C | Vanguard Reit vs. SCOR PK | Vanguard Reit vs. Aquagold International | Vanguard Reit vs. Morningstar Unconstrained Allocation |
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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