Correlation Between ProShares Ultra and GraniteShares
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and GraniteShares 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 Ultra and GraniteShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Ultra QQQ and GraniteShares 2x Long, you can compare the effects of market volatilities on ProShares Ultra and GraniteShares 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 Ultra with a short position of GraniteShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and GraniteShares.
Diversification Opportunities for ProShares Ultra and GraniteShares
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ProShares and GraniteShares is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra QQQ and GraniteShares 2x Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares 2x Long and ProShares Ultra 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 Ultra QQQ are associated (or correlated) with GraniteShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GraniteShares 2x Long has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and GraniteShares go up and down completely randomly.
Pair Corralation between ProShares Ultra and GraniteShares
Considering the 90-day investment horizon ProShares Ultra is expected to generate 1.63 times less return on investment than GraniteShares. But when comparing it to its historical volatility, ProShares Ultra QQQ is 1.3 times less risky than GraniteShares. It trades about 0.09 of its potential returns per unit of risk. GraniteShares 2x Long is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,719 in GraniteShares 2x Long on March 11, 2025 and sell it today you would earn a total of 601.00 from holding GraniteShares 2x Long or generate 34.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.44% |
| Values | Daily Returns |
ProShares Ultra QQQ vs. GraniteShares 2x Long
Performance |
| Timeline |
| ProShares Ultra QQQ |
| GraniteShares 2x Long |
ProShares Ultra and GraniteShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and GraniteShares
The main advantage of trading using opposite ProShares Ultra and GraniteShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, GraniteShares 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 GraniteShares will offset losses from the drop in GraniteShares' long position.| ProShares Ultra vs. ProShares Ultra SP500 | ProShares Ultra vs. ProShares UltraShort QQQ | ProShares Ultra vs. ProShares Ultra Dow30 | ProShares Ultra vs. ProShares Ultra Russell2000 |
| GraniteShares vs. Direxion Daily GOOGL | GraniteShares vs. Direxion Daily MSFT | GraniteShares vs. Direxion Shares ETF | GraniteShares vs. Direxion Daily AMZN |
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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