Correlation Between ProShares UltraShort and Blackrock Corporate
Can any of the company-specific risk be diversified away by investing in both ProShares UltraShort and Blackrock Corporate 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 UltraShort and Blackrock Corporate 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 Blackrock Corporate High, you can compare the effects of market volatilities on ProShares UltraShort and Blackrock Corporate 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 Blackrock Corporate. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraShort and Blackrock Corporate.
Diversification Opportunities for ProShares UltraShort and Blackrock Corporate
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and Blackrock is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraShort SP500 and Blackrock Corporate High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Corporate High and ProShares UltraShort 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 UltraShort SP500 are associated (or correlated) with Blackrock Corporate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Corporate High has no effect on the direction of ProShares UltraShort i.e., ProShares UltraShort and Blackrock Corporate go up and down completely randomly.
Pair Corralation between ProShares UltraShort and Blackrock Corporate
Considering the 90-day investment horizon ProShares UltraShort SP500 is expected to under-perform the Blackrock Corporate. In addition to that, ProShares UltraShort is 1.74 times more volatile than Blackrock Corporate High. It trades about -0.17 of its total potential returns per unit of risk. Blackrock Corporate High is currently generating about 0.18 per unit of volatility. If you would invest 784.00 in Blackrock Corporate High on January 18, 2024 and sell it today you would earn a total of 151.00 from holding Blackrock Corporate High or generate 19.26% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
ProShares UltraShort SP500 vs. Blackrock Corporate High
Performance |
Timeline |
ProShares UltraShort |
Blackrock Corporate High |
ProShares UltraShort and Blackrock Corporate Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ProShares UltraShort and Blackrock Corporate
The main advantage of trading using opposite ProShares UltraShort and Blackrock Corporate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraShort position performs unexpectedly, Blackrock Corporate 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 Blackrock Corporate will offset losses from the drop in Blackrock Corporate's long position.ProShares UltraShort vs. ProShares UltraShort QQQ | ProShares UltraShort vs. ProShares UltraShort Dow30 | ProShares UltraShort vs. ProShares Ultra SP500 | ProShares UltraShort vs. ProShares Short SP500 |
Blackrock Corporate vs. Credit Suisse High | Blackrock Corporate vs. MFS High Income | Blackrock Corporate vs. AllianzGI Convertible Income | Blackrock Corporate vs. MFS Investment Grade |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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