Correlation Between Dimensional Small and ProShares Long
Can any of the company-specific risk be diversified away by investing in both Dimensional Small and ProShares Long 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 Dimensional Small and ProShares Long into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dimensional Small Cap and ProShares Long OnlineShort, you can compare the effects of market volatilities on Dimensional Small and ProShares Long 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 Dimensional Small with a short position of ProShares Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dimensional Small and ProShares Long.
Diversification Opportunities for Dimensional Small and ProShares Long
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dimensional and ProShares is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Dimensional Small Cap and ProShares Long OnlineShort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Long Onlin and Dimensional Small 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 Dimensional Small Cap are associated (or correlated) with ProShares Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Long Onlin has no effect on the direction of Dimensional Small i.e., Dimensional Small and ProShares Long go up and down completely randomly.
Pair Corralation between Dimensional Small and ProShares Long
Given the investment horizon of 90 days Dimensional Small is expected to generate 1.41 times less return on investment than ProShares Long. In addition to that, Dimensional Small is 1.18 times more volatile than ProShares Long OnlineShort. It trades about 0.22 of its total potential returns per unit of risk. ProShares Long OnlineShort is currently generating about 0.36 per unit of volatility. If you would invest 4,460 in ProShares Long OnlineShort on April 24, 2025 and sell it today you would earn a total of 970.00 from holding ProShares Long OnlineShort or generate 21.75% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 98.39% |
Values | Daily Returns |
Dimensional Small Cap vs. ProShares Long OnlineShort
Performance |
Timeline |
Dimensional Small Cap |
ProShares Long Onlin |
Dimensional Small and ProShares Long Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dimensional Small and ProShares Long
The main advantage of trading using opposite Dimensional Small and ProShares Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dimensional Small position performs unexpectedly, ProShares Long 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 Long will offset losses from the drop in ProShares Long's long position.Dimensional Small vs. Dimensional Targeted Value | Dimensional Small vs. Dimensional Equity ETF | Dimensional Small vs. Dimensional Core Equity | Dimensional Small vs. Dimensional International Core |
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Check out your portfolio center.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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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