Correlation Between ProShares Ultra and Sydinvest Konservativ

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

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

Diversification Opportunities for ProShares Ultra and Sydinvest Konservativ

0.87

Correlation Coefficient

ProShares Ultra  Sydinvest Konservativ

Very poor diversification

The 3 months correlation between ProShares and Sydinvest is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Bloomberg and Sydinvest Konservativ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sydinvest Konservativ and ProShares Ultra 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 Ultra Bloomberg are associated (or correlated) with Sydinvest Konservativ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sydinvest Konservativ has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Sydinvest Konservativ go up and down completely randomly.

Pair Corralation between ProShares Ultra and Sydinvest Konservativ

Considering the 90-day investment horizon ProShares Ultra Bloomberg is expected to generate 16.77 times more return on investment than Sydinvest Konservativ. However, ProShares Ultra is 16.77 times more volatile than Sydinvest Konservativ. It trades about 0.04 of its potential returns per unit of risk. Sydinvest Konservativ is currently generating about 0.16 per unit of risk. If you would invest  2,842  in ProShares Ultra Bloomberg on January 19, 2024 and sell it today you would earn a total of  483.00  from holding ProShares Ultra Bloomberg or generate 17.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.6%
Values	Daily Returns

ProShares Ultra Bloomberg  vs.  Sydinvest Konservativ

ProShares Ultra Bloomberg

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares Ultra Bloomberg are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, ProShares Ultra displayed solid returns over the last few months and may actually be approaching a breakup point.

Sydinvest Konservativ

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sydinvest Konservativ are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Sydinvest Konservativ is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ProShares Ultra and Sydinvest Konservativ

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

The idea behind ProShares Ultra Bloomberg and Sydinvest Konservativ 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.