Correlation Between ProShares UltraShort and Japan 2x

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Can any of the company-specific risk be diversified away by investing in both ProShares UltraShort and Japan 2x 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 Japan 2x 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 Japan 2x Strategy, you can compare the effects of market volatilities on ProShares UltraShort and Japan 2x 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 Japan 2x. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraShort and Japan 2x.

Diversification Opportunities for ProShares UltraShort and Japan 2x

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between ProShares and Japan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraShort SP500 and JAPAN 2X STRATEGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan 2x Strategy 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 Japan 2x. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan 2x Strategy has no effect on the direction of ProShares UltraShort i.e., ProShares UltraShort and Japan 2x go up and down completely randomly.

Pair Corralation between ProShares UltraShort and Japan 2x

If you would invest (100.00) in Japan 2x Strategy on December 29, 2023 and sell it today you would earn a total of  100.00  from holding Japan 2x Strategy or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

ProShares UltraShort SP500  vs.  JAPAN 2X STRATEGY

 Performance 
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ProShares UltraShort 

Risk-Adjusted Performance

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Over the last 90 days ProShares UltraShort SP500 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Etf's fundamental indicators remain comparatively stable which may send shares a bit higher in April 2024. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.
Japan 2x Strategy 

Risk-Adjusted Performance

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Over the last 90 days Japan 2x Strategy has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Japan 2x is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

ProShares UltraShort and Japan 2x Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ProShares UltraShort and Japan 2x

The main advantage of trading using opposite ProShares UltraShort and Japan 2x positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraShort position performs unexpectedly, Japan 2x 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 Japan 2x will offset losses from the drop in Japan 2x's long position.
The idea behind ProShares UltraShort SP500 and Japan 2x Strategy 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.
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.

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