Correlation Between ProShares Nasdaq and AXS 2X

Can any of the company-specific risk be diversified away by investing in both ProShares Nasdaq and AXS 2X 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 Nasdaq and AXS 2X into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ProShares Nasdaq 100 Dorsey and AXS 2X Innovation, you can compare the effects of market volatilities on ProShares Nasdaq and AXS 2X 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 Nasdaq with a short position of AXS 2X. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Nasdaq and AXS 2X.

Diversification Opportunities for ProShares Nasdaq and AXS 2X

0.53

Correlation Coefficient

ProShares Nasdaq  AXS 2X

Very weak diversification

The 3 months correlation between ProShares and AXS is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Nasdaq 100 Dorsey and AXS 2X Innovation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXS 2X Innovation and ProShares Nasdaq 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 Nasdaq 100 Dorsey are associated (or correlated) with AXS 2X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXS 2X Innovation has no effect on the direction of ProShares Nasdaq i.e., ProShares Nasdaq and AXS 2X go up and down completely randomly.

Pair Corralation between ProShares Nasdaq and AXS 2X

Given the investment horizon of 90 days ProShares Nasdaq is expected to generate 10.03 times less return on investment than AXS 2X. But when comparing it to its historical volatility, ProShares Nasdaq 100 Dorsey is 5.89 times less risky than AXS 2X. It trades about 0.13 of its potential returns per unit of risk. AXS 2X Innovation is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  3,975  in AXS 2X Innovation on May 16, 2025 and sell it today you would earn a total of  2,783  from holding AXS 2X Innovation or generate 70.01% return on investment over 90 days.

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

ProShares Nasdaq 100 Dorsey  vs.  AXS 2X Innovation

ProShares Nasdaq 100

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares Nasdaq 100 Dorsey are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, ProShares Nasdaq is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

AXS 2X Innovation

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AXS 2X Innovation are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, AXS 2X disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ProShares Nasdaq and AXS 2X

The main advantage of trading using opposite ProShares Nasdaq and AXS 2X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Nasdaq position performs unexpectedly, AXS 2X 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 AXS 2X will offset losses from the drop in AXS 2X's long position.

The idea behind ProShares Nasdaq 100 Dorsey and AXS 2X Innovation 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.