Correlation Between MFUT and ETRACS 2x
Can any of the company-specific risk be diversified away by investing in both MFUT and ETRACS 2x 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 MFUT and ETRACS 2x into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MFUT and ETRACS 2x Leveraged, you can compare the effects of market volatilities on MFUT and ETRACS 2x 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 MFUT with a short position of ETRACS 2x. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFUT and ETRACS 2x.
Diversification Opportunities for MFUT and ETRACS 2x
Weak diversification
The 3 months correlation between MFUT and ETRACS is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding MFUT and ETRACS 2x Leveraged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETRACS 2x Leveraged and MFUT 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 MFUT are associated (or correlated) with ETRACS 2x. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETRACS 2x Leveraged has no effect on the direction of MFUT i.e., MFUT and ETRACS 2x go up and down completely randomly.
Pair Corralation between MFUT and ETRACS 2x
Given the investment horizon of 90 days MFUT is expected to generate 0.56 times more return on investment than ETRACS 2x. However, MFUT is 1.8 times less risky than ETRACS 2x. It trades about 0.11 of its potential returns per unit of risk. ETRACS 2x Leveraged is currently generating about 0.01 per unit of risk. If you would invest 1,455 in MFUT on June 10, 2025 and sell it today you would earn a total of 54.00 from holding MFUT or generate 3.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFUT vs. ETRACS 2x Leveraged
Performance |
| Timeline |
| MFUT |
| ETRACS 2x Leveraged |
MFUT and ETRACS 2x Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFUT and ETRACS 2x
The main advantage of trading using opposite MFUT and ETRACS 2x positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFUT position performs unexpectedly, ETRACS 2x 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 ETRACS 2x will offset losses from the drop in ETRACS 2x's long position.| MFUT vs. Strategy Shares | MFUT vs. Freedom Day Dividend | MFUT vs. Franklin Templeton ETF | MFUT vs. iShares MSCI China |
| ETRACS 2x vs. ProShares Ultra SP500 | ETRACS 2x vs. Direxion Daily SP500 | ETRACS 2x vs. ProShares Ultra QQQ | ETRACS 2x vs. Bank of Montreal |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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