Correlation Between ProShares Ultra and FlexShares Developed

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

By analyzing existing cross correlation between ProShares Ultra Nasdaq and FlexShares Developed Markets, you can compare the effects of market volatilities on ProShares Ultra and FlexShares Developed 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 FlexShares Developed. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and FlexShares Developed.

Diversification Opportunities for ProShares Ultra and FlexShares Developed

0.39

Correlation Coefficient

ProShares Ultra  FlexShares Developed

Weak diversification

The 3 months correlation between ProShares and FlexShares is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Nasdaq and FlexShares Developed Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FlexShares Developed 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 Nasdaq are associated (or correlated) with FlexShares Developed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FlexShares Developed has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and FlexShares Developed go up and down completely randomly.

Pair Corralation between ProShares Ultra and FlexShares Developed

Considering the 90-day investment horizon ProShares Ultra Nasdaq is expected to generate 3.69 times more return on investment than FlexShares Developed. However, ProShares Ultra is 3.69 times more volatile than FlexShares Developed Markets. It trades about 0.47 of its potential returns per unit of risk. FlexShares Developed Markets is currently generating about 0.24 per unit of risk. If you would invest  5,546  in ProShares Ultra Nasdaq on July 27, 2025 and sell it today you would earn a total of  1,152  from holding ProShares Ultra Nasdaq or generate 20.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

ProShares Ultra Nasdaq  vs.  FlexShares Developed Markets

ProShares Ultra Nasdaq

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares Ultra Nasdaq are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady forward indicators, ProShares Ultra sustained solid returns over the last few months and may actually be approaching a breakup point.

FlexShares Developed

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in FlexShares Developed Markets are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, FlexShares Developed is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with ProShares Ultra and FlexShares Developed

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

The idea behind ProShares Ultra Nasdaq and FlexShares Developed Markets 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.