Correlation Between FT Cboe and ProShares
Can any of the company-specific risk be diversified away by investing in both FT Cboe and ProShares 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 FT Cboe and ProShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FT Cboe Vest and ProShares SP 500, you can compare the effects of market volatilities on FT Cboe and ProShares 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 FT Cboe with a short position of ProShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of FT Cboe and ProShares.
Diversification Opportunities for FT Cboe and ProShares
Almost no diversification
The 3 months correlation between KNG and ProShares is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding FT Cboe Vest and ProShares SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares SP 500 and FT Cboe 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 FT Cboe Vest are associated (or correlated) with ProShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares SP 500 has no effect on the direction of FT Cboe i.e., FT Cboe and ProShares go up and down completely randomly.
Pair Corralation between FT Cboe and ProShares
Considering the 90-day investment horizon FT Cboe is expected to generate 1.26 times less return on investment than ProShares. But when comparing it to its historical volatility, FT Cboe Vest is 1.03 times less risky than ProShares. It trades about 0.12 of its potential returns per unit of risk. ProShares SP 500 is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 4,050 in ProShares SP 500 on June 4, 2025 and sell it today you would earn a total of 236.00 from holding ProShares SP 500 or generate 5.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.41% |
| Values | Daily Returns |
FT Cboe Vest vs. ProShares SP 500
Performance |
| Timeline |
| FT Cboe Vest |
| ProShares SP 500 |
FT Cboe and ProShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FT Cboe and ProShares
The main advantage of trading using opposite FT Cboe and ProShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FT Cboe position performs unexpectedly, ProShares 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 will offset losses from the drop in ProShares' long position.| FT Cboe vs. Amplify CWP Enhanced | FT Cboe vs. JPMorgan Equity Premium | FT Cboe vs. Global X NASDAQ | FT Cboe vs. Global X Russell |
| ProShares vs. FT Vest Equity | ProShares vs. Northern Lights | ProShares vs. Dimensional International High | ProShares vs. JPMorgan Fundamental Data |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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