Correlation Between ProShares Trust and Invesco Dynamic

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

By analyzing existing cross correlation between ProShares Trust and Invesco Dynamic Building, you can compare the effects of market volatilities on ProShares Trust and Invesco Dynamic 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 Invesco Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Trust and Invesco Dynamic.

Diversification Opportunities for ProShares Trust and Invesco Dynamic

-0.59

Correlation Coefficient

ProShares Trust  Invesco Dynamic

Excellent diversification

The 3 months correlation between ProShares and Invesco is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Trust and Invesco Dynamic Building in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Dynamic Building 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 Invesco Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Dynamic Building has no effect on the direction of ProShares Trust i.e., ProShares Trust and Invesco Dynamic go up and down completely randomly.

Pair Corralation between ProShares Trust and Invesco Dynamic

Given the investment horizon of 90 days ProShares Trust is expected to under-perform the Invesco Dynamic. In addition to that, ProShares Trust is 1.77 times more volatile than Invesco Dynamic Building. It trades about -0.1 of its total potential returns per unit of risk. Invesco Dynamic Building is currently generating about 0.21 per unit of volatility. If you would invest  7,755  in Invesco Dynamic Building on May 11, 2025 and sell it today you would earn a total of  1,161  from holding Invesco Dynamic Building or generate 14.97% return on investment over 90 days.

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

ProShares Trust   vs.  Invesco Dynamic Building

ProShares Trust

Risk-Adjusted Performance

Weakest

Over the last 90 days ProShares Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Etf's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the Etf traders.

Invesco Dynamic Building

Risk-Adjusted Performance

Solid

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

Pair Trading with ProShares Trust and Invesco Dynamic

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

The idea behind ProShares Trust and Invesco Dynamic Building 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.