Correlation Between ProShares UltraPro and Seluxit AS

Can any of the company-specific risk be diversified away by investing in both ProShares UltraPro and Seluxit AS 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 UltraPro and Seluxit AS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ProShares UltraPro QQQ and Seluxit AS, you can compare the effects of market volatilities on ProShares UltraPro and Seluxit AS 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 UltraPro with a short position of Seluxit AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraPro and Seluxit AS.

Diversification Opportunities for ProShares UltraPro and Seluxit AS

-0.11

Correlation Coefficient

ProShares UltraPro  Seluxit AS

Good diversification

The 3 months correlation between ProShares and Seluxit is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraPro QQQ and Seluxit AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seluxit AS and ProShares UltraPro 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 UltraPro QQQ are associated (or correlated) with Seluxit AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seluxit AS has no effect on the direction of ProShares UltraPro i.e., ProShares UltraPro and Seluxit AS go up and down completely randomly.

Pair Corralation between ProShares UltraPro and Seluxit AS

Given the investment horizon of 90 days ProShares UltraPro QQQ is expected to under-perform the Seluxit AS. But the etf apears to be less risky and, when comparing its historical volatility, ProShares UltraPro QQQ is 2.37 times less risky than Seluxit AS. The etf trades about -0.19 of its potential returns per unit of risk. The Seluxit AS is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  368.00  in Seluxit AS on January 26, 2024 and sell it today you would lose (18.00) from holding Seluxit AS or give up 4.89% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.48%
Values	Daily Returns

ProShares UltraPro QQQ  vs.  Seluxit AS

ProShares UltraPro QQQ

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ProShares UltraPro QQQ has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, ProShares UltraPro is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Seluxit AS

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Seluxit AS are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Seluxit AS exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ProShares UltraPro and Seluxit AS

The main advantage of trading using opposite ProShares UltraPro and Seluxit AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraPro position performs unexpectedly, Seluxit AS 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 Seluxit AS will offset losses from the drop in Seluxit AS's long position.

The idea behind ProShares UltraPro QQQ and Seluxit AS 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.