Correlation Between Exchange Traded and ProShares Short

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

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

Diversification Opportunities for Exchange Traded and ProShares Short

0.66

Correlation Coefficient

Exchange Traded  ProShares Short

Poor diversification

The 3 months correlation between Exchange and ProShares is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Exchange Traded Concepts and ProShares Short QQQ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Short QQQ and Exchange Traded 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 Exchange Traded Concepts 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 QQQ has no effect on the direction of Exchange Traded i.e., Exchange Traded and ProShares Short go up and down completely randomly.

Pair Corralation between Exchange Traded and ProShares Short

Given the investment horizon of 90 days Exchange Traded Concepts is expected to generate 0.04 times more return on investment than ProShares Short. However, Exchange Traded Concepts is 28.11 times less risky than ProShares Short. It trades about 0.41 of its potential returns per unit of risk. ProShares Short QQQ is currently generating about -0.25 per unit of risk. If you would invest  2,410  in Exchange Traded Concepts on July 18, 2025 and sell it today you would earn a total of  2.00  from holding Exchange Traded Concepts or generate 0.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	4.8%
Values	Daily Returns

Exchange Traded Concepts  vs.  ProShares Short QQQ

Exchange Traded Concepts

Risk-Adjusted Performance

Weakest

Over the last 90 days Exchange Traded Concepts has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Exchange Traded is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

ProShares Short QQQ

Risk-Adjusted Performance

Weakest

Over the last 90 days ProShares Short QQQ has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, ProShares Short is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Exchange Traded and ProShares Short

The main advantage of trading using opposite Exchange Traded and ProShares Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exchange Traded 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 Exchange Traded Concepts and ProShares Short QQQ 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.