diversifiable risk of combining ProShares UltraShort and Advantis Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares UltraShort SP500 and Advantis Corp, you can compare the effects of market volatilities on ProShares UltraShort and Advantis Corp 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 UltraShort with a short position of Advantis Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraShort and Advantis Corp.
Diversification Opportunities for ProShares UltraShort and Advantis Corp
Pair Corralation between ProShares UltraShort and Advantis Corp
ProShares UltraShort SP500 vs. Advantis Corp
ProShares UltraShort and Advantis Corp Volatility Contrast
Pair Trading with ProShares UltraShort and Advantis CorpThe main advantage of trading using opposite ProShares UltraShort and Advantis Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraShort position performs unexpectedly, Advantis Corp 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 Advantis Corp will offset losses from the drop in Advantis Corp's long position. The idea behind ProShares UltraShort SP500 and Advantis Corp 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.
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.