Correlation Between Davis Select and ProShares Trust
Can any of the company-specific risk be diversified away by investing in both Davis Select and ProShares Trust 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 Davis Select and ProShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Davis Select International and ProShares Trust , you can compare the effects of market volatilities on Davis Select and ProShares Trust 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 Davis Select with a short position of ProShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Davis Select and ProShares Trust.
Diversification Opportunities for Davis Select and ProShares Trust
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Davis and ProShares is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Davis Select International and ProShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Trust and Davis Select 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 Davis Select International are associated (or correlated) with ProShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Trust has no effect on the direction of Davis Select i.e., Davis Select and ProShares Trust go up and down completely randomly.
Pair Corralation between Davis Select and ProShares Trust
Given the investment horizon of 90 days Davis Select International is expected to generate 2.81 times more return on investment than ProShares Trust. However, Davis Select is 2.81 times more volatile than ProShares Trust . It trades about 0.08 of its potential returns per unit of risk. ProShares Trust is currently generating about 0.08 per unit of risk. If you would invest 2,510 in Davis Select International on June 6, 2025 and sell it today you would earn a total of 114.00 from holding Davis Select International or generate 4.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 78.69% |
| Values | Daily Returns |
Davis Select International vs. ProShares Trust
Performance |
| Timeline |
| Davis Select Interna |
| ProShares Trust |
Davis Select and ProShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Davis Select and ProShares Trust
The main advantage of trading using opposite Davis Select and ProShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Davis Select position performs unexpectedly, ProShares Trust 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 ProShares Trust will offset losses from the drop in ProShares Trust's long position.| Davis Select vs. First Trust Dorsey | Davis Select vs. Davis Select Financial | Davis Select vs. Davis Select Worldwide |
| ProShares Trust vs. Dimensional ETF Trust | ProShares Trust vs. Vanguard Small Cap Index | ProShares Trust vs. First Trust Multi Manager | ProShares Trust vs. Vanguard SP Small Cap |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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