Correlation Between Proshares Russell and Vanguard Russell
Can any of the company-specific risk be diversified away by investing in both Proshares Russell and Vanguard Russell 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 Russell and Vanguard Russell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Proshares Russell 2000 and Vanguard Russell 2000, you can compare the effects of market volatilities on Proshares Russell and Vanguard Russell 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 Russell with a short position of Vanguard Russell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Proshares Russell and Vanguard Russell.
Diversification Opportunities for Proshares Russell and Vanguard Russell
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Proshares and Vanguard is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Proshares Russell 2000 and Vanguard Russell 2000 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Russell 2000 and Proshares Russell 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 Russell 2000 are associated (or correlated) with Vanguard Russell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Russell 2000 has no effect on the direction of Proshares Russell i.e., Proshares Russell and Vanguard Russell go up and down completely randomly.
Pair Corralation between Proshares Russell and Vanguard Russell
Given the investment horizon of 90 days Proshares Russell is expected to generate 1.15 times less return on investment than Vanguard Russell. But when comparing it to its historical volatility, Proshares Russell 2000 is 1.14 times less risky than Vanguard Russell. It trades about 0.15 of its potential returns per unit of risk. Vanguard Russell 2000 is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 38,953 in Vanguard Russell 2000 on June 12, 2025 and sell it today you would earn a total of 4,283 from holding Vanguard Russell 2000 or generate 11.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Proshares Russell 2000 vs. Vanguard Russell 2000
Performance |
| Timeline |
| Proshares Russell 2000 |
| Vanguard Russell 2000 |
Proshares Russell and Vanguard Russell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Proshares Russell and Vanguard Russell
The main advantage of trading using opposite Proshares Russell and Vanguard Russell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Proshares Russell position performs unexpectedly, Vanguard Russell 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 Russell will offset losses from the drop in Vanguard Russell's long position.| Proshares Russell vs. Franklin Templeton ETF | Proshares Russell vs. iShares Dividend and | Proshares Russell vs. Altrius Global Dividend | Proshares Russell vs. Invesco Exchange Traded |
| Vanguard Russell vs. Vanguard FTSE Canadian | Vanguard Russell vs. Vanguard Funds Public | Vanguard Russell vs. Vanguard Funds Public | Vanguard Russell vs. Vanguard Funds Public |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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