Correlation Between VanEck Agribusiness and ProShares Smart

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

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

Diversification Opportunities for VanEck Agribusiness and ProShares Smart

0.63

Correlation Coefficient

VanEck Agribusiness  ProShares Smart

Poor diversification

The 3 months correlation between VanEck and ProShares is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Agribusiness ETF and ProShares Smart Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Smart Materials and VanEck Agribusiness 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 VanEck Agribusiness ETF are associated (or correlated) with ProShares Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Smart Materials has no effect on the direction of VanEck Agribusiness i.e., VanEck Agribusiness and ProShares Smart go up and down completely randomly.

Pair Corralation between VanEck Agribusiness and ProShares Smart

Considering the 90-day investment horizon VanEck Agribusiness is expected to generate 2.35 times less return on investment than ProShares Smart. But when comparing it to its historical volatility, VanEck Agribusiness ETF is 1.49 times less risky than ProShares Smart. It trades about 0.09 of its potential returns per unit of risk. ProShares Smart Materials is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  2,802  in ProShares Smart Materials on May 3, 2025 and sell it today you would earn a total of  277.00  from holding ProShares Smart Materials or generate 9.89% return on investment over 90 days.

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

VanEck Agribusiness ETF  vs.  ProShares Smart Materials

VanEck Agribusiness ETF

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck Agribusiness ETF are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, VanEck Agribusiness is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

ProShares Smart Materials

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares Smart Materials are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, ProShares Smart may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with VanEck Agribusiness and ProShares Smart

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

The idea behind VanEck Agribusiness ETF and ProShares Smart Materials 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.