Correlation Between ProShares Short and Cambria Tail
Can any of the company-specific risk be diversified away by investing in both ProShares Short and Cambria Tail 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 Short and Cambria Tail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Short Dow30 and Cambria Tail Risk, you can compare the effects of market volatilities on ProShares Short and Cambria Tail 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 Short with a short position of Cambria Tail. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Short and Cambria Tail.
Diversification Opportunities for ProShares Short and Cambria Tail
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ProShares and Cambria is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Short Dow30 and Cambria Tail Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambria Tail Risk and ProShares Short 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 Short Dow30 are associated (or correlated) with Cambria Tail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambria Tail Risk has no effect on the direction of ProShares Short i.e., ProShares Short and Cambria Tail go up and down completely randomly.
Pair Corralation between ProShares Short and Cambria Tail
Considering the 90-day investment horizon ProShares Short Dow30 is expected to under-perform the Cambria Tail. In addition to that, ProShares Short is 1.36 times more volatile than Cambria Tail Risk. It trades about -0.05 of its total potential returns per unit of risk. Cambria Tail Risk is currently generating about -0.04 per unit of volatility. If you would invest 1,166 in Cambria Tail Risk on October 5, 2025 and sell it today you would lose (18.00) from holding Cambria Tail Risk or give up 1.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.41% |
| Values | Daily Returns |
ProShares Short Dow30 vs. Cambria Tail Risk
Performance |
| Timeline |
| ProShares Short Dow30 |
| Cambria Tail Risk |
ProShares Short and Cambria Tail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Short and Cambria Tail
The main advantage of trading using opposite ProShares Short and Cambria Tail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Short position performs unexpectedly, Cambria Tail 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 Cambria Tail will offset losses from the drop in Cambria Tail's long position.| ProShares Short vs. ProShares Short Russell2000 | ProShares Short vs. Direxion Daily MSCI | ProShares Short vs. Direxion Daily Select | ProShares Short vs. Direxion Daily South |
| Cambria Tail vs. Simplify Equity PLUS | Cambria Tail vs. AIM ETF Products | Cambria Tail vs. Simplify Equity PLUS | Cambria Tail vs. FT Cboe Vest |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |