Correlation Between Northern Funds and ProShares UltraPro
Can any of the company-specific risk be diversified away by investing in both Northern Funds and ProShares UltraPro 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 Northern Funds and ProShares UltraPro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northern Funds and ProShares UltraPro Russell2000, you can compare the effects of market volatilities on Northern Funds and ProShares UltraPro 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 Northern Funds with a short position of ProShares UltraPro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Funds and ProShares UltraPro.
Diversification Opportunities for Northern Funds and ProShares UltraPro
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Northern and ProShares is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Northern Funds and ProShares UltraPro Russell2000 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraPro and Northern Funds 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 Northern Funds are associated (or correlated) with ProShares UltraPro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares UltraPro has no effect on the direction of Northern Funds i.e., Northern Funds and ProShares UltraPro go up and down completely randomly.
Pair Corralation between Northern Funds and ProShares UltraPro
Given the investment horizon of 90 days Northern Funds is expected to generate 1.18 times less return on investment than ProShares UltraPro. But when comparing it to its historical volatility, Northern Funds is 25.16 times less risky than ProShares UltraPro. It trades about 0.34 of its potential returns per unit of risk. ProShares UltraPro Russell2000 is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 4,731 in ProShares UltraPro Russell2000 on August 25, 2025 and sell it today you would lose (18.00) from holding ProShares UltraPro Russell2000 or give up 0.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northern Funds vs. ProShares UltraPro Russell2000
Performance |
| Timeline |
| Northern Funds |
| ProShares UltraPro |
Northern Funds and ProShares UltraPro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northern Funds and ProShares UltraPro
The main advantage of trading using opposite Northern Funds and ProShares UltraPro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern Funds position performs unexpectedly, ProShares UltraPro 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 UltraPro will offset losses from the drop in ProShares UltraPro's long position.| Northern Funds vs. Northern Funds | Northern Funds vs. Northern Trust Short Term | Northern Funds vs. Northern Trust Intermediate | Northern Funds vs. SPDR SP Kensho |
| ProShares UltraPro vs. Direxion Daily CSI | ProShares UltraPro vs. FlexShares Global Quality | ProShares UltraPro vs. Invesco Exchange Traded | ProShares UltraPro vs. Goldman Sachs ETF |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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