Correlation Between Fidelity Corporate and ProShares Long

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

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

Diversification Opportunities for Fidelity Corporate and ProShares Long

0.75

Correlation Coefficient

Fidelity Corporate  ProShares Long

Poor diversification

The 3 months correlation between Fidelity and ProShares is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Corporate Bond 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 Fidelity Corporate 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 Fidelity Corporate Bond 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 Fidelity Corporate i.e., Fidelity Corporate and ProShares Long go up and down completely randomly.

Pair Corralation between Fidelity Corporate and ProShares Long

Given the investment horizon of 90 days Fidelity Corporate is expected to generate 7.57 times less return on investment than ProShares Long. But when comparing it to its historical volatility, Fidelity Corporate Bond is 3.34 times less risky than ProShares Long. It trades about 0.15 of its potential returns per unit of risk. ProShares Long OnlineShort is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest  4,554  in ProShares Long OnlineShort on May 3, 2025 and sell it today you would earn a total of  1,034  from holding ProShares Long OnlineShort or generate 22.71% return on investment over 90 days.

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

Fidelity Corporate Bond  vs.  ProShares Long OnlineShort

Fidelity Corporate Bond

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Corporate Bond are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Fidelity Corporate is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

ProShares Long Onlin

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares Long OnlineShort are ranked lower than 27 (%) 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.

Pair Trading with Fidelity Corporate and ProShares Long

The main advantage of trading using opposite Fidelity Corporate and ProShares Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Corporate 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.

The idea behind Fidelity Corporate Bond and ProShares Long OnlineShort 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 Stocks Directory module to find actively traded stocks across global markets.