Correlation Between ProShares Decline and WisdomTree Cloud

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

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

Diversification Opportunities for ProShares Decline and WisdomTree Cloud

-0.38

Correlation Coefficient

ProShares Decline  WisdomTree Cloud

Very good diversification

The 3 months correlation between ProShares and WisdomTree is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Decline of and WisdomTree Cloud Computing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Cloud Com and ProShares Decline 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 Decline of are associated (or correlated) with WisdomTree Cloud. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Cloud Com has no effect on the direction of ProShares Decline i.e., ProShares Decline and WisdomTree Cloud go up and down completely randomly.

Pair Corralation between ProShares Decline and WisdomTree Cloud

Given the investment horizon of 90 days ProShares Decline of is expected to under-perform the WisdomTree Cloud. But the etf apears to be less risky and, when comparing its historical volatility, ProShares Decline of is 1.17 times less risky than WisdomTree Cloud. The etf trades about -0.11 of its potential returns per unit of risk. The WisdomTree Cloud Computing is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  3,617  in WisdomTree Cloud Computing on May 10, 2025 and sell it today you would lose (184.00) from holding WisdomTree Cloud Computing or give up 5.09% of portfolio value over 90 days.

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

ProShares Decline of  vs.  WisdomTree Cloud Computing

ProShares Decline

Risk-Adjusted Performance

Weakest

Over the last 90 days ProShares Decline of has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

WisdomTree Cloud Com

Risk-Adjusted Performance

Weakest

Over the last 90 days WisdomTree Cloud Computing has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, WisdomTree Cloud is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with ProShares Decline and WisdomTree Cloud

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

The idea behind ProShares Decline of and WisdomTree Cloud Computing 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.