Correlation Between ProShares Ultra and WisdomTree China
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and WisdomTree China 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 WisdomTree China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Ultra Semiconductors and WisdomTree China ex State Owned, you can compare the effects of market volatilities on ProShares Ultra and WisdomTree China 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 WisdomTree China. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and WisdomTree China.
Diversification Opportunities for ProShares Ultra and WisdomTree China
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ProShares and WisdomTree is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Semiconductors and WisdomTree China ex State Owne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree China 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 Semiconductors are associated (or correlated) with WisdomTree China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree China has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and WisdomTree China go up and down completely randomly.
Pair Corralation between ProShares Ultra and WisdomTree China
Considering the 90-day investment horizon ProShares Ultra Semiconductors is expected to generate 2.4 times more return on investment than WisdomTree China. However, ProShares Ultra is 2.4 times more volatile than WisdomTree China ex State Owned. It trades about 0.19 of its potential returns per unit of risk. WisdomTree China ex State Owned is currently generating about 0.27 per unit of risk. If you would invest 6,006 in ProShares Ultra Semiconductors on June 5, 2025 and sell it today you would earn a total of 2,144 from holding ProShares Ultra Semiconductors or generate 35.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.39% |
| Values | Daily Returns |
ProShares Ultra Semiconductors vs. WisdomTree China ex State Owne
Performance |
| Timeline |
| ProShares Ultra Semi |
| WisdomTree China |
ProShares Ultra and WisdomTree China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and WisdomTree China
The main advantage of trading using opposite ProShares Ultra and WisdomTree China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, WisdomTree China 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 WisdomTree China will offset losses from the drop in WisdomTree China's long position.| ProShares Ultra vs. ProShares Ultra Technology | ProShares Ultra vs. ProShares Ultra Industrials | ProShares Ultra vs. ProShares Ultra Basic | ProShares Ultra vs. ProShares Ultra Health |
| WisdomTree China vs. Global X MSCI | WisdomTree China vs. WisdomTree Emerging Markets | WisdomTree China vs. Invesco China Technology | WisdomTree China vs. iShares MSCI China |
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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