Correlation Between Pitney Bowes and ProShares UltraShort

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

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

Diversification Opportunities for Pitney Bowes and ProShares UltraShort

-0.77

Correlation Coefficient

Pitney Bowes  ProShares UltraShort

Pay attention - limited upside

The 3 months correlation between Pitney and ProShares is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Pitney Bowes and ProShares UltraShort Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort and Pitney Bowes 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 Pitney Bowes are associated (or correlated) with ProShares UltraShort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares UltraShort has no effect on the direction of Pitney Bowes i.e., Pitney Bowes and ProShares UltraShort go up and down completely randomly.

Pair Corralation between Pitney Bowes and ProShares UltraShort

Considering the 90-day investment horizon Pitney Bowes is expected to generate 1.5 times more return on investment than ProShares UltraShort. However, Pitney Bowes is 1.5 times more volatile than ProShares UltraShort Utilities. It trades about 0.16 of its potential returns per unit of risk. ProShares UltraShort Utilities is currently generating about -0.13 per unit of risk. If you would invest  895.00  in Pitney Bowes on May 5, 2025 and sell it today you would earn a total of  230.00  from holding Pitney Bowes or generate 25.7% return on investment over 90 days.

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

Pitney Bowes  vs.  ProShares UltraShort Utilities

Pitney Bowes

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pitney Bowes are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady fundamental drivers, Pitney Bowes demonstrated solid returns over the last few months and may actually be approaching a breakup point.

ProShares UltraShort

Risk-Adjusted Performance

Very Weak

Over the last 90 days ProShares UltraShort Utilities has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Etf's fundamental indicators remain relatively invariable which may send shares a bit higher in September 2025. The latest agitation may also be a sign of long-running up-swing for the ETF retail investors.

Pair Trading with Pitney Bowes and ProShares UltraShort

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

The idea behind Pitney Bowes and ProShares UltraShort Utilities 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.