Correlation Between ProShares Short and Direxion
Can any of the company-specific risk be diversified away by investing in both ProShares Short and Direxion 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 Short and Direxion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Short Dow30 and Direxion, you can compare the effects of market volatilities on ProShares Short and Direxion 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 Short with a short position of Direxion. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Short and Direxion.
Diversification Opportunities for ProShares Short and Direxion
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between ProShares and Direxion is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Short Dow30 and Direxion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direxion and ProShares Short 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 Short Dow30 are associated (or correlated) with Direxion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direxion has no effect on the direction of ProShares Short i.e., ProShares Short and Direxion go up and down completely randomly.
Pair Corralation between ProShares Short and Direxion
If you would invest 2,873 in ProShares Short Dow30 on March 13, 2024 and sell it today you would earn a total of 62.00 from holding ProShares Short Dow30 or generate 2.16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 1.61% |
Values | Daily Returns |
ProShares Short Dow30 vs. Direxion
Performance |
Timeline |
ProShares Short Dow30 |
Direxion |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ProShares Short and Direxion Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ProShares Short and Direxion
The main advantage of trading using opposite ProShares Short and Direxion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Short position performs unexpectedly, Direxion 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 Direxion will offset losses from the drop in Direxion's long position.ProShares Short vs. ProShares Short Russell2000 | ProShares Short vs. SCOR PK | ProShares Short vs. Morningstar Unconstrained Allocation | ProShares Short vs. Via Renewables |
Direxion vs. ProShares Short Russell2000 | Direxion vs. SCOR PK | Direxion vs. Morningstar Unconstrained Allocation | Direxion vs. Via Renewables |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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