Correlation Between ProShares Online and ProShares Long

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

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

Diversification Opportunities for ProShares Online and ProShares Long

0.99

Correlation Coefficient

ProShares Online  ProShares Long

No risk reduction

The 3 months correlation between ProShares and ProShares is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Online Retail and ProShares Long OnlineShort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Long Onlin and ProShares Online 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 Online Retail are associated (or correlated) with ProShares Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Long Onlin has no effect on the direction of ProShares Online i.e., ProShares Online and ProShares Long go up and down completely randomly.

Pair Corralation between ProShares Online and ProShares Long

Given the investment horizon of 90 days ProShares Online Retail is expected to generate 1.32 times more return on investment than ProShares Long. However, ProShares Online is 1.32 times more volatile than ProShares Long OnlineShort. It trades about 0.32 of its potential returns per unit of risk. ProShares Long OnlineShort is currently generating about 0.33 per unit of risk. If you would invest  4,243  in ProShares Online Retail on May 1, 2025 and sell it today you would earn a total of  1,140  from holding ProShares Online Retail or generate 26.87% return on investment over 90 days.

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

ProShares Online Retail  vs.  ProShares Long OnlineShort

ProShares Online Retail

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares Online Retail are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of very weak essential indicators, ProShares Online displayed solid returns over the last few months and may actually be approaching a breakup point.

ProShares Long Onlin

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares Long OnlineShort are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating forward indicators, ProShares Long showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ProShares Online and ProShares Long

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

The idea behind ProShares Online Retail and ProShares Long OnlineShort 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.