Correlation Between ProShares Trust and Argo Group

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

By analyzing existing cross correlation between ProShares Trust and Argo Group 65, you can compare the effects of market volatilities on ProShares Trust and Argo Group 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 Trust with a short position of Argo Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Trust and Argo Group.

Diversification Opportunities for ProShares Trust and Argo Group

0.85

Correlation Coefficient

ProShares Trust  Argo Group

Very poor diversification

The 3 months correlation between ProShares and Argo is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Trust and Argo Group 65 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Group 65 and ProShares Trust 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 Trust are associated (or correlated) with Argo Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argo Group 65 has no effect on the direction of ProShares Trust i.e., ProShares Trust and Argo Group go up and down completely randomly.

Pair Corralation between ProShares Trust and Argo Group

Given the investment horizon of 90 days ProShares Trust is expected to generate 4.03 times more return on investment than Argo Group. However, ProShares Trust is 4.03 times more volatile than Argo Group 65. It trades about 0.14 of its potential returns per unit of risk. Argo Group 65 is currently generating about 0.32 per unit of risk. If you would invest  7,361  in ProShares Trust on May 14, 2025 and sell it today you would earn a total of  1,266  from holding ProShares Trust or generate 17.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.39%
Values	Daily Returns

ProShares Trust  vs.  Argo Group 65

ProShares Trust

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares Trust are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, ProShares Trust demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Argo Group 65

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Argo Group 65 are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting technical and fundamental indicators, Argo Group may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with ProShares Trust and Argo Group

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

The idea behind ProShares Trust and Argo Group 65 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.