Correlation Between ProShares UltraPro and Dimensional Emerging

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

By analyzing existing cross correlation between ProShares UltraPro SP500 and Dimensional Emerging Core, you can compare the effects of market volatilities on ProShares UltraPro and Dimensional Emerging 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 Dimensional Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraPro and Dimensional Emerging.

Diversification Opportunities for ProShares UltraPro and Dimensional Emerging

0.86

Correlation Coefficient

ProShares UltraPro  Dimensional Emerging

Very poor diversification

The 3 months correlation between ProShares and Dimensional is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraPro SP500 and Dimensional Emerging Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimensional Emerging Core 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 SP500 are associated (or correlated) with Dimensional Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimensional Emerging Core has no effect on the direction of ProShares UltraPro i.e., ProShares UltraPro and Dimensional Emerging go up and down completely randomly.

Pair Corralation between ProShares UltraPro and Dimensional Emerging

Given the investment horizon of 90 days ProShares UltraPro SP500 is expected to generate 2.49 times more return on investment than Dimensional Emerging. However, ProShares UltraPro is 2.49 times more volatile than Dimensional Emerging Core. It trades about 0.09 of its potential returns per unit of risk. Dimensional Emerging Core is currently generating about 0.1 per unit of risk. If you would invest  10,366  in ProShares UltraPro SP500 on September 9, 2025 and sell it today you would earn a total of  1,329  from holding ProShares UltraPro SP500 or generate 12.82% return on investment over 90 days.

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

ProShares UltraPro SP500  vs.  Dimensional Emerging Core

ProShares UltraPro SP500

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares UltraPro SP500 are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, ProShares UltraPro displayed solid returns over the last few months and may actually be approaching a breakup point.

Dimensional Emerging Core

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Dimensional Emerging Core are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Dimensional Emerging is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with ProShares UltraPro and Dimensional Emerging

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

The idea behind ProShares UltraPro SP500 and Dimensional Emerging Core 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.