Correlation Between ProShares Ultra and SPDR MSCI

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

By analyzing existing cross correlation between ProShares Ultra QQQ and SPDR MSCI Emerging, you can compare the effects of market volatilities on ProShares Ultra and SPDR MSCI 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 SPDR MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and SPDR MSCI.

Diversification Opportunities for ProShares Ultra and SPDR MSCI

0.97

Correlation Coefficient

ProShares Ultra  SPDR MSCI

Almost no diversification

The 3 months correlation between ProShares and SPDR is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra QQQ and SPDR MSCI Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR MSCI Emerging 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 QQQ are associated (or correlated) with SPDR MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR MSCI Emerging has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and SPDR MSCI go up and down completely randomly.

Pair Corralation between ProShares Ultra and SPDR MSCI

Considering the 90-day investment horizon ProShares Ultra QQQ is expected to generate 1.87 times more return on investment than SPDR MSCI. However, ProShares Ultra is 1.87 times more volatile than SPDR MSCI Emerging. It trades about 0.19 of its potential returns per unit of risk. SPDR MSCI Emerging is currently generating about 0.21 per unit of risk. If you would invest  10,551  in ProShares Ultra QQQ on May 27, 2025 and sell it today you would earn a total of  1,949  from holding ProShares Ultra QQQ or generate 18.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.44%
Values	Daily Returns

ProShares Ultra QQQ  vs.  SPDR MSCI Emerging

ProShares Ultra QQQ

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares Ultra QQQ are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating essential indicators, ProShares Ultra exhibited solid returns over the last few months and may actually be approaching a breakup point.

SPDR MSCI Emerging

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR MSCI Emerging are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating primary indicators, SPDR MSCI may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with ProShares Ultra and SPDR MSCI

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

The idea behind ProShares Ultra QQQ and SPDR MSCI Emerging 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.