Correlation Between ProShares Ultra and ProShares Ultra

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

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

Diversification Opportunities for ProShares Ultra and ProShares Ultra

-0.71

Correlation Coefficient

ProShares Ultra  ProShares Ultra

Pay attention - limited upside

The 3 months correlation between ProShares and ProShares is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Telecommunicat and ProShares Ultra Yen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Ultra Yen and ProShares Ultra 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 Ultra Telecommunications are associated (or correlated) with ProShares Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Ultra Yen has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and ProShares Ultra go up and down completely randomly.

Pair Corralation between ProShares Ultra and ProShares Ultra

Considering the 90-day investment horizon ProShares Ultra Telecommunications is expected to generate 1.41 times more return on investment than ProShares Ultra. However, ProShares Ultra is 1.41 times more volatile than ProShares Ultra Yen. It trades about 0.16 of its potential returns per unit of risk. ProShares Ultra Yen is currently generating about -0.07 per unit of risk. If you would invest  8,784  in ProShares Ultra Telecommunications on May 27, 2025 and sell it today you would earn a total of  1,516  from holding ProShares Ultra Telecommunications or generate 17.26% return on investment over 90 days.

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

ProShares Ultra Telecommunicat  vs.  ProShares Ultra Yen

ProShares Ultra Tele

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares Ultra Telecommunications are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, ProShares Ultra disclosed solid returns over the last few months and may actually be approaching a breakup point.

ProShares Ultra Yen

Risk-Adjusted Performance

Weakest

Over the last 90 days ProShares Ultra Yen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, ProShares Ultra is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with ProShares Ultra and ProShares Ultra

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

The idea behind ProShares Ultra Telecommunications and ProShares Ultra Yen 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.