Correlation Between ProShares UltraShort and Pacer Swan

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

By analyzing existing cross correlation between ProShares UltraShort Russell2000 and Pacer Swan SOS, you can compare the effects of market volatilities on ProShares UltraShort and Pacer Swan 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 Pacer Swan. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraShort and Pacer Swan.

Diversification Opportunities for ProShares UltraShort and Pacer Swan

-0.69

Correlation Coefficient

ProShares UltraShort  Pacer Swan

Excellent diversification

The 3 months correlation between ProShares and Pacer is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraShort Russell20 and Pacer Swan SOS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Swan SOS 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 Russell2000 are associated (or correlated) with Pacer Swan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Swan SOS has no effect on the direction of ProShares UltraShort i.e., ProShares UltraShort and Pacer Swan go up and down completely randomly.

Pair Corralation between ProShares UltraShort and Pacer Swan

Considering the 90-day investment horizon ProShares UltraShort Russell2000 is expected to under-perform the Pacer Swan. In addition to that, ProShares UltraShort is 7.18 times more volatile than Pacer Swan SOS. It trades about -0.09 of its total potential returns per unit of risk. Pacer Swan SOS is currently generating about 0.09 per unit of volatility. If you would invest  3,275  in Pacer Swan SOS on September 11, 2025 and sell it today you would earn a total of  22.00  from holding Pacer Swan SOS or generate 0.67% return on investment over 90 days.

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

ProShares UltraShort Russell20  vs.  Pacer Swan SOS

ProShares UltraShort

Risk-Adjusted Performance

Weakest

Over the last 90 days ProShares UltraShort Russell2000 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Etf's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Pacer Swan SOS

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Pacer Swan SOS are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively steady technical and fundamental indicators, Pacer Swan is not utilizing all of its potentials. The latest stock price chaos, may contribute to medium-term losses for the stakeholders.

Pair Trading with ProShares UltraShort and Pacer Swan

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

The idea behind ProShares UltraShort Russell2000 and Pacer Swan SOS 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.