Correlation Between Barclays Capital and ProShares Inflation

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Can any of the company-specific risk be diversified away by investing in both Barclays Capital and ProShares Inflation 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 Barclays Capital and ProShares Inflation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barclays Capital and ProShares Inflation Expectations, you can compare the effects of market volatilities on Barclays Capital and ProShares Inflation 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 Barclays Capital with a short position of ProShares Inflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays Capital and ProShares Inflation.

Diversification Opportunities for Barclays Capital and ProShares Inflation

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Barclays and ProShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Barclays Capital and ProShares Inflation Expectatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Inflation and Barclays Capital 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 Barclays Capital are associated (or correlated) with ProShares Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Inflation has no effect on the direction of Barclays Capital i.e., Barclays Capital and ProShares Inflation go up and down completely randomly.

Pair Corralation between Barclays Capital and ProShares Inflation

If you would invest  3,226  in ProShares Inflation Expectations on December 30, 2023 and sell it today you would earn a total of  9.00  from holding ProShares Inflation Expectations or generate 0.28% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Barclays Capital  vs.  ProShares Inflation Expectatio

 Performance 
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Barclays Capital 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Barclays Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Barclays Capital is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.
ProShares Inflation 

Risk-Adjusted Performance

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Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in ProShares Inflation Expectations are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, ProShares Inflation is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Barclays Capital and ProShares Inflation Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Barclays Capital and ProShares Inflation

The main advantage of trading using opposite Barclays Capital and ProShares Inflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays Capital position performs unexpectedly, ProShares Inflation 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 Inflation will offset losses from the drop in ProShares Inflation's long position.
The idea behind Barclays Capital and ProShares Inflation Expectations pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

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