Correlation Between ProShares UltraPro and Schwab Fundamental
Can any of the company-specific risk be diversified away by investing in both ProShares UltraPro and Schwab Fundamental 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 UltraPro and Schwab Fundamental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares UltraPro SP500 and Schwab Fundamental International, you can compare the effects of market volatilities on ProShares UltraPro and Schwab Fundamental 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 UltraPro with a short position of Schwab Fundamental. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraPro and Schwab Fundamental.
Diversification Opportunities for ProShares UltraPro and Schwab Fundamental
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ProShares and Schwab is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraPro SP500 and Schwab Fundamental Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schwab Fundamental and ProShares UltraPro 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 UltraPro SP500 are associated (or correlated) with Schwab Fundamental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schwab Fundamental has no effect on the direction of ProShares UltraPro i.e., ProShares UltraPro and Schwab Fundamental go up and down completely randomly.
Pair Corralation between ProShares UltraPro and Schwab Fundamental
Given the investment horizon of 90 days ProShares UltraPro SP500 is expected to generate 2.32 times more return on investment than Schwab Fundamental. However, ProShares UltraPro is 2.32 times more volatile than Schwab Fundamental International. It trades about 0.23 of its potential returns per unit of risk. Schwab Fundamental International is currently generating about 0.16 per unit of risk. If you would invest 8,083 in ProShares UltraPro SP500 on May 31, 2025 and sell it today you would earn a total of 2,277 from holding ProShares UltraPro SP500 or generate 28.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares UltraPro SP500 vs. Schwab Fundamental Internation
Performance |
| Timeline |
| ProShares UltraPro SP500 |
| Schwab Fundamental |
ProShares UltraPro and Schwab Fundamental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares UltraPro and Schwab Fundamental
The main advantage of trading using opposite ProShares UltraPro and Schwab Fundamental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraPro position performs unexpectedly, Schwab Fundamental 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 Schwab Fundamental will offset losses from the drop in Schwab Fundamental's long position.| ProShares UltraPro vs. ProShares UltraPro Dow30 | ProShares UltraPro vs. ProShares UltraPro Short | ProShares UltraPro vs. ProShares UltraPro QQQ | ProShares UltraPro vs. Direxion Daily Small |
| Schwab Fundamental vs. Schwab Fundamental Small | Schwab Fundamental vs. Schwab Fundamental Large | Schwab Fundamental vs. Schwab Fundamental International | Schwab Fundamental vs. Schwab Fundamental Emerging |
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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.
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