Correlation Between MicroSectors Gold and ProShares Short

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

By analyzing existing cross correlation between MicroSectors Gold Miners and ProShares Short Russell2000, you can compare the effects of market volatilities on MicroSectors Gold 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 MicroSectors Gold with a short position of ProShares Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of MicroSectors Gold and ProShares Short.

Diversification Opportunities for MicroSectors Gold and ProShares Short

-0.43

Correlation Coefficient

MicroSectors Gold  ProShares Short

Very good diversification

The 3 months correlation between MicroSectors and ProShares is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding MicroSectors Gold Miners and ProShares Short Russell2000 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Short Russ and MicroSectors Gold 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 MicroSectors Gold Miners 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 Russ has no effect on the direction of MicroSectors Gold i.e., MicroSectors Gold and ProShares Short go up and down completely randomly.

Pair Corralation between MicroSectors Gold and ProShares Short

Given the investment horizon of 90 days MicroSectors Gold Miners is expected to generate 4.92 times more return on investment than ProShares Short. However, MicroSectors Gold is 4.92 times more volatile than ProShares Short Russell2000. It trades about 0.15 of its potential returns per unit of risk. ProShares Short Russell2000 is currently generating about -0.15 per unit of risk. If you would invest  6,592  in MicroSectors Gold Miners on May 26, 2025 and sell it today you would earn a total of  3,735  from holding MicroSectors Gold Miners or generate 56.66% return on investment over 90 days.

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

MicroSectors Gold Miners  vs.  ProShares Short Russell2000

MicroSectors Gold Miners

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MicroSectors Gold Miners are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, MicroSectors Gold unveiled solid returns over the last few months and may actually be approaching a breakup point.

ProShares Short Russ

Risk-Adjusted Performance

Weakest

Over the last 90 days ProShares Short Russell2000 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 healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Pair Trading with MicroSectors Gold and ProShares Short

The main advantage of trading using opposite MicroSectors Gold and ProShares Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MicroSectors Gold 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 MicroSectors Gold Miners and ProShares Short Russell2000 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.