Correlation Between WisdomTree Managed and ProShares
Can any of the company-specific risk be diversified away by investing in both WisdomTree Managed and ProShares 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 WisdomTree Managed and ProShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Managed Futures and ProShares SP 500, you can compare the effects of market volatilities on WisdomTree Managed and ProShares 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 WisdomTree Managed with a short position of ProShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Managed and ProShares.
Diversification Opportunities for WisdomTree Managed and ProShares
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between WisdomTree and ProShares is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Managed Futures and ProShares SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares SP 500 and WisdomTree Managed 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 WisdomTree Managed Futures are associated (or correlated) with ProShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares SP 500 has no effect on the direction of WisdomTree Managed i.e., WisdomTree Managed and ProShares go up and down completely randomly.
Pair Corralation between WisdomTree Managed and ProShares
Given the investment horizon of 90 days WisdomTree Managed Futures is expected to generate 0.4 times more return on investment than ProShares. However, WisdomTree Managed Futures is 2.52 times less risky than ProShares. It trades about 0.06 of its potential returns per unit of risk. ProShares SP 500 is currently generating about 0.01 per unit of risk. If you would invest 3,418 in WisdomTree Managed Futures on March 22, 2025 and sell it today you would earn a total of 72.94 from holding WisdomTree Managed Futures or generate 2.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Managed Futures vs. ProShares SP 500
Performance |
| Timeline |
| WisdomTree Managed |
| ProShares SP 500 |
WisdomTree Managed and ProShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Managed and ProShares
The main advantage of trading using opposite WisdomTree Managed and ProShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Managed position performs unexpectedly, ProShares 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 will offset losses from the drop in ProShares' long position.| WisdomTree Managed vs. First Trust Managed | WisdomTree Managed vs. iMGP DBi Managed | WisdomTree Managed vs. First Trust LongShort | WisdomTree Managed vs. SPDR SSgA Multi Asset |
| ProShares vs. Global X Funds | ProShares vs. Global X SP | ProShares vs. Global X Russell | ProShares vs. Global X Nasdaq |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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