Correlation Between SPDR Barclays and ProShares UltraShort

Can any of the company-specific risk be diversified away by investing in both SPDR Barclays and ProShares UltraShort 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 UltraShort 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 UltraShort Bloomberg, you can compare the effects of market volatilities on SPDR Barclays and ProShares UltraShort 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 UltraShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Barclays and ProShares UltraShort.

Diversification Opportunities for SPDR Barclays and ProShares UltraShort

-0.72

Correlation Coefficient

SPDR Barclays  ProShares UltraShort

Pay attention - limited upside

The 3 months correlation between SPDR and ProShares is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Barclays Intermediate and ProShares UltraShort Bloomberg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort 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 UltraShort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares UltraShort has no effect on the direction of SPDR Barclays i.e., SPDR Barclays and ProShares UltraShort go up and down completely randomly.

Pair Corralation between SPDR Barclays and ProShares UltraShort

Given the investment horizon of 90 days SPDR Barclays Intermediate is expected to generate 0.06 times more return on investment than ProShares UltraShort. However, SPDR Barclays Intermediate is 18.02 times less risky than ProShares UltraShort. It trades about 0.16 of its potential returns per unit of risk. ProShares UltraShort Bloomberg is currently generating about -0.06 per unit of risk. If you would invest  3,283  in SPDR Barclays Intermediate on April 25, 2025 and sell it today you would earn a total of  62.00  from holding SPDR Barclays Intermediate or generate 1.89% return on investment over 90 days.

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

SPDR Barclays Intermediate  vs.  ProShares UltraShort Bloomberg

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 12 (%) 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 UltraShort

Risk-Adjusted Performance

Very Weak

Over the last 90 days ProShares UltraShort Bloomberg has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Etf's fundamental indicators remain very healthy which may send shares a bit higher in August 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

Pair Trading with SPDR Barclays and ProShares UltraShort

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

The idea behind SPDR Barclays Intermediate and ProShares UltraShort Bloomberg 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.