Correlation Between T Rex and ProShares UltraShort

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

By analyzing existing cross correlation between T Rex 2X Long and ProShares UltraShort SP500, you can compare the effects of market volatilities on T Rex and ProShares UltraShort 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 T Rex with a short position of ProShares UltraShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of T Rex and ProShares UltraShort.

Diversification Opportunities for T Rex and ProShares UltraShort

0.24

Correlation Coefficient

T Rex  ProShares UltraShort

Modest diversification

The 3 months correlation between BTCL and ProShares is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding T Rex 2X Long and ProShares UltraShort SP500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort and T Rex 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 T Rex 2X Long are associated (or correlated) with ProShares UltraShort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares UltraShort has no effect on the direction of T Rex i.e., T Rex and ProShares UltraShort go up and down completely randomly.

Pair Corralation between T Rex and ProShares UltraShort

Given the investment horizon of 90 days T Rex 2X Long is expected to generate 3.08 times more return on investment than ProShares UltraShort. However, T Rex is 3.08 times more volatile than ProShares UltraShort SP500. It trades about 0.07 of its potential returns per unit of risk. ProShares UltraShort SP500 is currently generating about -0.08 per unit of risk. If you would invest  2,363  in T Rex 2X Long on July 23, 2025 and sell it today you would earn a total of  2,814  from holding T Rex 2X Long or generate 119.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	65.52%
Values	Daily Returns

T Rex 2X Long  vs.  ProShares UltraShort SP500

T Rex 2X

Risk-Adjusted Performance

Weakest

Over the last 90 days T Rex 2X Long has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Etf's fundamental indicators remain quite persistent which may send shares a bit higher in November 2025. The latest mess may also be a sign of long-standing up-swing for the ETF venture institutional investors.

ProShares UltraShort

Risk-Adjusted Performance

Weakest

Over the last 90 days ProShares UltraShort SP500 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Etf's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

Pair Trading with T Rex and ProShares UltraShort

The main advantage of trading using opposite T Rex and ProShares UltraShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T Rex position performs unexpectedly, ProShares UltraShort 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 UltraShort will offset losses from the drop in ProShares UltraShort's long position.

The idea behind T Rex 2X Long and ProShares UltraShort SP500 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.