Correlation Between ProShares UltraShort and ProShares Smart

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

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

Diversification Opportunities for ProShares UltraShort and ProShares Smart

-0.79

Correlation Coefficient

ProShares UltraShort  ProShares Smart

Pay attention - limited upside

The 3 months correlation between ProShares and ProShares is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraShort Consumer and ProShares Smart Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Smart Materials and ProShares UltraShort 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 UltraShort Consumer are associated (or correlated) with ProShares Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Smart Materials has no effect on the direction of ProShares UltraShort i.e., ProShares UltraShort and ProShares Smart go up and down completely randomly.

Pair Corralation between ProShares UltraShort and ProShares Smart

Considering the 90-day investment horizon ProShares UltraShort Consumer is expected to under-perform the ProShares Smart. In addition to that, ProShares UltraShort is 1.84 times more volatile than ProShares Smart Materials. It trades about -0.15 of its total potential returns per unit of risk. ProShares Smart Materials is currently generating about 0.3 per unit of volatility. If you would invest  3,302  in ProShares Smart Materials on October 9, 2025 and sell it today you would earn a total of  182.00  from holding ProShares Smart Materials or generate 5.51% return on investment over 90 days.

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

ProShares UltraShort Consumer  vs.  ProShares Smart Materials

ProShares UltraShort

Risk-Adjusted Performance

Weakest

Over the last 90 days ProShares UltraShort Consumer has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, ProShares UltraShort is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

ProShares Smart Materials

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares Smart Materials are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, ProShares Smart may actually be approaching a critical reversion point that can send shares even higher in February 2026.

Pair Trading with ProShares UltraShort and ProShares Smart

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

The idea behind ProShares UltraShort Consumer and ProShares Smart Materials 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.