Correlation Between ProShares UltraPro and Wattanapat Hospital

Can any of the company-specific risk be diversified away by investing in both ProShares UltraPro and Wattanapat Hospital 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 Wattanapat Hospital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ProShares UltraPro QQQ and Wattanapat Hospital Trang, you can compare the effects of market volatilities on ProShares UltraPro and Wattanapat Hospital 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 Wattanapat Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraPro and Wattanapat Hospital.

Diversification Opportunities for ProShares UltraPro and Wattanapat Hospital

0.44

Correlation Coefficient

ProShares UltraPro  Wattanapat Hospital

Very weak diversification

The 3 months correlation between ProShares and Wattanapat is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraPro QQQ and Wattanapat Hospital Trang in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wattanapat Hospital Trang 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 QQQ are associated (or correlated) with Wattanapat Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wattanapat Hospital Trang has no effect on the direction of ProShares UltraPro i.e., ProShares UltraPro and Wattanapat Hospital go up and down completely randomly.

Pair Corralation between ProShares UltraPro and Wattanapat Hospital

Given the investment horizon of 90 days ProShares UltraPro QQQ is expected to under-perform the Wattanapat Hospital. But the etf apears to be less risky and, when comparing its historical volatility, ProShares UltraPro QQQ is 1.01 times less risky than Wattanapat Hospital. The etf trades about -0.27 of its potential returns per unit of risk. The Wattanapat Hospital Trang is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  820.00  in Wattanapat Hospital Trang on January 20, 2024 and sell it today you would earn a total of  20.00  from holding Wattanapat Hospital Trang or generate 2.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	86.36%
Values	Daily Returns

ProShares UltraPro QQQ  vs.  Wattanapat Hospital Trang

ProShares UltraPro QQQ

Risk-Adjusted Performance

0 of 100

Very Weak

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

Wattanapat Hospital Trang

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Wattanapat Hospital Trang are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite weak technical indicators, Wattanapat Hospital disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ProShares UltraPro and Wattanapat Hospital

The main advantage of trading using opposite ProShares UltraPro and Wattanapat Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraPro position performs unexpectedly, Wattanapat Hospital 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 Wattanapat Hospital will offset losses from the drop in Wattanapat Hospital's long position.

The idea behind ProShares UltraPro QQQ and Wattanapat Hospital Trang 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.