Correlation Between Proshares Russell and ProShares UltraPro

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

By analyzing existing cross correlation between Proshares Russell 2000 and ProShares UltraPro Short, you can compare the effects of market volatilities on Proshares Russell and ProShares UltraPro 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 Russell with a short position of ProShares UltraPro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Proshares Russell and ProShares UltraPro.

Diversification Opportunities for Proshares Russell and ProShares UltraPro

-0.66

Correlation Coefficient

Proshares Russell  ProShares UltraPro

Excellent diversification

The 3 months correlation between Proshares and ProShares is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Proshares Russell 2000 and ProShares UltraPro Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraPro Short and Proshares Russell 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 Russell 2000 are associated (or correlated) with ProShares UltraPro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares UltraPro Short has no effect on the direction of Proshares Russell i.e., Proshares Russell and ProShares UltraPro go up and down completely randomly.

Pair Corralation between Proshares Russell and ProShares UltraPro

Given the investment horizon of 90 days Proshares Russell 2000 is expected to generate 2.29 times more return on investment than ProShares UltraPro. However, Proshares Russell is 2.29 times more volatile than ProShares UltraPro Short. It trades about 0.05 of its potential returns per unit of risk. ProShares UltraPro Short is currently generating about -0.11 per unit of risk. If you would invest  3,682  in Proshares Russell 2000 on July 11, 2025 and sell it today you would earn a total of  314.50  from holding Proshares Russell 2000 or generate 8.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Proshares Russell 2000  vs.  ProShares UltraPro Short

Proshares Russell 2000

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Proshares Russell 2000 are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Proshares Russell displayed solid returns over the last few months and may actually be approaching a breakup point.

ProShares UltraPro Short

Risk-Adjusted Performance

Weakest

Over the last 90 days ProShares UltraPro Short has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Etf's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the fund sophisticated investors.

Pair Trading with Proshares Russell and ProShares UltraPro

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

The idea behind Proshares Russell 2000 and ProShares UltraPro Short 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 Transaction History module to view history of all your transactions and understand their impact on performance.