Correlation Between Ultrapar Participacoes and ProShares UltraShort
Can any of the company-specific risk be diversified away by investing in both Ultrapar Participacoes and ProShares UltraShort 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 Ultrapar Participacoes and ProShares UltraShort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ultrapar Participacoes SA and ProShares UltraShort Consumer, you can compare the effects of market volatilities on Ultrapar Participacoes and ProShares UltraShort 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 Ultrapar Participacoes with a short position of ProShares UltraShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultrapar Participacoes and ProShares UltraShort.
Diversification Opportunities for Ultrapar Participacoes and ProShares UltraShort
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ultrapar and ProShares is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Ultrapar Participacoes SA and ProShares UltraShort Consumer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort and Ultrapar Participacoes 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 Ultrapar Participacoes SA are associated (or correlated) with ProShares UltraShort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares UltraShort has no effect on the direction of Ultrapar Participacoes i.e., Ultrapar Participacoes and ProShares UltraShort go up and down completely randomly.
Pair Corralation between Ultrapar Participacoes and ProShares UltraShort
Considering the 90-day investment horizon Ultrapar Participacoes SA is expected to generate 1.23 times more return on investment than ProShares UltraShort. However, Ultrapar Participacoes is 1.23 times more volatile than ProShares UltraShort Consumer. It trades about 0.2 of its potential returns per unit of risk. ProShares UltraShort Consumer is currently generating about -0.13 per unit of risk. If you would invest 278.00 in Ultrapar Participacoes SA on May 31, 2025 and sell it today you would earn a total of 92.00 from holding Ultrapar Participacoes SA or generate 33.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ultrapar Participacoes SA vs. ProShares UltraShort Consumer
Performance |
| Timeline |
| Ultrapar Participacoes |
| ProShares UltraShort |
Ultrapar Participacoes and ProShares UltraShort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultrapar Participacoes and ProShares UltraShort
The main advantage of trading using opposite Ultrapar Participacoes and ProShares UltraShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultrapar Participacoes position performs unexpectedly, ProShares UltraShort 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 UltraShort will offset losses from the drop in ProShares UltraShort's long position.| Ultrapar Participacoes vs. Cosan SA ADR | Ultrapar Participacoes vs. Neste Oyj | Ultrapar Participacoes vs. Star Gas Partners | Ultrapar Participacoes vs. Valvoline |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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