Correlation Between Strategy Shares and ProShares Smart

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

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

Diversification Opportunities for Strategy Shares and ProShares Smart

0.97

Correlation Coefficient

Strategy Shares  ProShares Smart

Almost no diversification

The 3 months correlation between Strategy and ProShares is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Strategy Shares and ProShares Smart Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Smart Materials and Strategy Shares 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 Strategy Shares are associated (or correlated) with ProShares Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Smart Materials has no effect on the direction of Strategy Shares i.e., Strategy Shares and ProShares Smart go up and down completely randomly.

Pair Corralation between Strategy Shares and ProShares Smart

Given the investment horizon of 90 days Strategy Shares is expected to generate 3.71 times less return on investment than ProShares Smart. But when comparing it to its historical volatility, Strategy Shares is 5.96 times less risky than ProShares Smart. It trades about 0.29 of its potential returns per unit of risk. ProShares Smart Materials is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  2,843  in ProShares Smart Materials on May 21, 2025 and sell it today you would earn a total of  377.00  from holding ProShares Smart Materials or generate 13.26% return on investment over 90 days.

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

Strategy Shares  vs.  ProShares Smart Materials

Strategy Shares

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Strategy Shares are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Strategy Shares is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

ProShares Smart Materials

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares Smart Materials are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, ProShares Smart unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Strategy Shares and ProShares Smart

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

The idea behind Strategy Shares and ProShares Smart Materials 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.

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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.