Correlation Between ProShares Short and ProShares Long

Can any of the company-specific risk be diversified away by investing in both ProShares Short 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 Short 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 Short Financials and ProShares Long OnlineShort, you can compare the effects of market volatilities on ProShares Short 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 Short with a short position of ProShares Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Short and ProShares Long.

Diversification Opportunities for ProShares Short and ProShares Long

-0.81

Correlation Coefficient

ProShares Short  ProShares Long

Pay attention - limited upside

The 3 months correlation between ProShares and ProShares is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Short Financials 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 Short 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 Short Financials 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 Short i.e., ProShares Short and ProShares Long go up and down completely randomly.

Pair Corralation between ProShares Short and ProShares Long

Considering the 90-day investment horizon ProShares Short Financials is expected to under-perform the ProShares Long. But the etf apears to be less risky and, when comparing its historical volatility, ProShares Short Financials is 1.31 times less risky than ProShares Long. The etf trades about -0.06 of its potential returns per unit of risk. The ProShares Long OnlineShort is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  4,585  in ProShares Long OnlineShort on May 6, 2025 and sell it today you would earn a total of  788.00  from holding ProShares Long OnlineShort or generate 17.19% return on investment over 90 days.

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

ProShares Short Financials  vs.  ProShares Long OnlineShort

ProShares Short Fina

Risk-Adjusted Performance

Very Weak

Over the last 90 days ProShares Short Financials has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, ProShares Short is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

ProShares Long Onlin

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares Long OnlineShort are ranked lower than 18 (%) 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 Short and ProShares Long

The main advantage of trading using opposite ProShares Short and ProShares Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Short 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 Short Financials 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..