Correlation Between ProShares Long and ProShares Short

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

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

Diversification Opportunities for ProShares Long and ProShares Short

-0.93

Correlation Coefficient

ProShares Long  ProShares Short

Pay attention - limited upside

The 3 months correlation between ProShares and ProShares is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Long OnlineShort and ProShares Short FTSE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Short FTSE and ProShares Long 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 Long OnlineShort are associated (or correlated) with ProShares Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Short FTSE has no effect on the direction of ProShares Long i.e., ProShares Long and ProShares Short go up and down completely randomly.

Pair Corralation between ProShares Long and ProShares Short

Given the investment horizon of 90 days ProShares Long OnlineShort is expected to generate 0.93 times more return on investment than ProShares Short. However, ProShares Long OnlineShort is 1.08 times less risky than ProShares Short. It trades about 0.19 of its potential returns per unit of risk. ProShares Short FTSE is currently generating about -0.11 per unit of risk. If you would invest  4,721  in ProShares Long OnlineShort on May 8, 2025 and sell it today you would earn a total of  610.62  from holding ProShares Long OnlineShort or generate 12.93% return on investment over 90 days.

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

ProShares Long OnlineShort  vs.  ProShares Short FTSE

ProShares Long Onlin

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares Long OnlineShort are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating forward indicators, ProShares Long showed solid returns over the last few months and may actually be approaching a breakup point.

ProShares Short FTSE

Risk-Adjusted Performance

Weakest

Over the last 90 days ProShares Short FTSE 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.

Pair Trading with ProShares Long and ProShares Short

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

The idea behind ProShares Long OnlineShort and ProShares Short FTSE 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.