Correlation Between ProShares UltraPro and Tactical Advantage

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

By analyzing existing cross correlation between ProShares UltraPro MidCap400 and Tactical Advantage ETF, you can compare the effects of market volatilities on ProShares UltraPro and Tactical Advantage 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 UltraPro with a short position of Tactical Advantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraPro and Tactical Advantage.

Diversification Opportunities for ProShares UltraPro and Tactical Advantage

0.68

Correlation Coefficient

ProShares UltraPro  Tactical Advantage

Poor diversification

The 3 months correlation between ProShares and Tactical is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraPro MidCap400 and Tactical Advantage ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tactical Advantage ETF and ProShares UltraPro 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 UltraPro MidCap400 are associated (or correlated) with Tactical Advantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tactical Advantage ETF has no effect on the direction of ProShares UltraPro i.e., ProShares UltraPro and Tactical Advantage go up and down completely randomly.

Pair Corralation between ProShares UltraPro and Tactical Advantage

Given the investment horizon of 90 days ProShares UltraPro MidCap400 is expected to generate 3.87 times more return on investment than Tactical Advantage. However, ProShares UltraPro is 3.87 times more volatile than Tactical Advantage ETF. It trades about 0.02 of its potential returns per unit of risk. Tactical Advantage ETF is currently generating about -0.02 per unit of risk. If you would invest  2,610  in ProShares UltraPro MidCap400 on October 6, 2025 and sell it today you would earn a total of  38.00  from holding ProShares UltraPro MidCap400 or generate 1.46% return on investment over 90 days.

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

ProShares UltraPro MidCap400  vs.  Tactical Advantage ETF

ProShares UltraPro

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares UltraPro MidCap400 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, ProShares UltraPro is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Tactical Advantage ETF

Risk-Adjusted Performance

Weakest

Over the last 90 days Tactical Advantage ETF has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Tactical Advantage is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with ProShares UltraPro and Tactical Advantage

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

The idea behind ProShares UltraPro MidCap400 and Tactical Advantage ETF 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.