Correlation Between ProShares Ultra and Defiance Daily
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and Defiance Daily 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 Defiance Daily into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Ultra Financials and Defiance Daily Target, you can compare the effects of market volatilities on ProShares Ultra and Defiance Daily 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 Defiance Daily. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and Defiance Daily.
Diversification Opportunities for ProShares Ultra and Defiance Daily
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between ProShares and Defiance is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Financials and Defiance Daily Target in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Defiance Daily Target 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 Financials are associated (or correlated) with Defiance Daily. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Defiance Daily Target has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Defiance Daily go up and down completely randomly.
Pair Corralation between ProShares Ultra and Defiance Daily
Considering the 90-day investment horizon ProShares Ultra Financials is expected to under-perform the Defiance Daily. But the etf apears to be less risky and, when comparing its historical volatility, ProShares Ultra Financials is 8.96 times less risky than Defiance Daily. The etf trades about -0.02 of its potential returns per unit of risk. The Defiance Daily Target is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 4,447 in Defiance Daily Target on August 31, 2025 and sell it today you would earn a total of 3,030 from holding Defiance Daily Target or generate 68.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra Financials vs. Defiance Daily Target
Performance |
| Timeline |
| ProShares Ultra Fina |
| Defiance Daily Target |
ProShares Ultra and Defiance Daily Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and Defiance Daily
The main advantage of trading using opposite ProShares Ultra and Defiance Daily positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, Defiance Daily 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 Defiance Daily will offset losses from the drop in Defiance Daily's long position.| ProShares Ultra vs. Direxion Daily Regional | ProShares Ultra vs. iShares MSCI Europe | ProShares Ultra vs. First Trust Exchange Traded | ProShares Ultra vs. Fidelity MSCI Financials |
| Defiance Daily vs. Strategy Shares | Defiance Daily vs. Freedom Day Dividend | Defiance Daily vs. Franklin Templeton ETF | Defiance Daily 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Stocks Directory Find actively traded stocks across global markets |