Correlation Between ProShares UltraShort and Vanguard Intermediate
Can any of the company-specific risk be diversified away by investing in both ProShares UltraShort and Vanguard Intermediate 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 Vanguard Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares UltraShort Yen and Vanguard Intermediate Term Corporate, you can compare the effects of market volatilities on ProShares UltraShort and Vanguard Intermediate 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 Vanguard Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraShort and Vanguard Intermediate.
Diversification Opportunities for ProShares UltraShort and Vanguard Intermediate
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ProShares and Vanguard is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraShort Yen and Vanguard Intermediate Term Cor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Intermediate 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 Yen are associated (or correlated) with Vanguard Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Intermediate has no effect on the direction of ProShares UltraShort i.e., ProShares UltraShort and Vanguard Intermediate go up and down completely randomly.
Pair Corralation between ProShares UltraShort and Vanguard Intermediate
Considering the 90-day investment horizon ProShares UltraShort Yen is expected to generate 3.07 times more return on investment than Vanguard Intermediate. However, ProShares UltraShort is 3.07 times more volatile than Vanguard Intermediate Term Corporate. It trades about 0.17 of its potential returns per unit of risk. Vanguard Intermediate Term Corporate is currently generating about 0.08 per unit of risk. If you would invest 8,133 in ProShares UltraShort Yen on March 20, 2024 and sell it today you would earn a total of 926.00 from holding ProShares UltraShort Yen or generate 11.39% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
ProShares UltraShort Yen vs. Vanguard Intermediate Term Cor
Performance |
Timeline |
ProShares UltraShort Yen |
Vanguard Intermediate |
ProShares UltraShort and Vanguard Intermediate Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ProShares UltraShort and Vanguard Intermediate
The main advantage of trading using opposite ProShares UltraShort and Vanguard Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraShort position performs unexpectedly, Vanguard Intermediate 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 Vanguard Intermediate will offset losses from the drop in Vanguard Intermediate's long position.ProShares UltraShort vs. Direxion Daily SP | ProShares UltraShort vs. SCOR PK | ProShares UltraShort vs. HUMANA INC | ProShares UltraShort vs. Aquagold International |
Vanguard Intermediate vs. iShares 25 Year | Vanguard Intermediate vs. HUMANA INC | Vanguard Intermediate vs. Aquagold International | Vanguard Intermediate vs. Barloworld Ltd ADR |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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