Correlation Between SPDR Barclays and ProShares Trust

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

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

Diversification Opportunities for SPDR Barclays and ProShares Trust

-0.38

Correlation Coefficient

SPDR Barclays  ProShares Trust

Very good diversification

The 3 months correlation between SPDR and ProShares is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Barclays Intermediate and ProShares Trust ProShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Trust ProShares and SPDR Barclays 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 SPDR Barclays Intermediate are associated (or correlated) with ProShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Trust ProShares has no effect on the direction of SPDR Barclays i.e., SPDR Barclays and ProShares Trust go up and down completely randomly.

Pair Corralation between SPDR Barclays and ProShares Trust

Given the investment horizon of 90 days SPDR Barclays is expected to generate 2.28 times less return on investment than ProShares Trust. But when comparing it to its historical volatility, SPDR Barclays Intermediate is 1.7 times less risky than ProShares Trust. It trades about 0.19 of its potential returns per unit of risk. ProShares Trust ProShares is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  3,991  in ProShares Trust ProShares on April 24, 2025 and sell it today you would earn a total of  59.00  from holding ProShares Trust ProShares or generate 1.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	29.03%
Values	Daily Returns

SPDR Barclays Intermediate  vs.  ProShares Trust ProShares

SPDR Barclays Interm

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Barclays Intermediate are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward indicators, SPDR Barclays is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

ProShares Trust ProShares

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares Trust ProShares are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, ProShares Trust is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SPDR Barclays and ProShares Trust

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

The idea behind SPDR Barclays Intermediate and ProShares Trust ProShares 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.

Check out your portfolio center.

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 CEOs Directory module to screen CEOs from public companies around the world.