Correlation Between ProShares Ultra and SPDR Barclays

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

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

Diversification Opportunities for ProShares Ultra and SPDR Barclays

0.91

Correlation Coefficient

ProShares Ultra  SPDR Barclays

Almost no diversification

The 3 months correlation between ProShares and SPDR is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Semiconductors and SPDR Barclays Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Barclays Interm and ProShares Ultra 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 Ultra Semiconductors are associated (or correlated) with SPDR Barclays. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Barclays Interm has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and SPDR Barclays go up and down completely randomly.

Pair Corralation between ProShares Ultra and SPDR Barclays

Considering the 90-day investment horizon ProShares Ultra Semiconductors is expected to generate 17.12 times more return on investment than SPDR Barclays. However, ProShares Ultra is 17.12 times more volatile than SPDR Barclays Intermediate. It trades about 0.38 of its potential returns per unit of risk. SPDR Barclays Intermediate is currently generating about 0.17 per unit of risk. If you would invest  3,956  in ProShares Ultra Semiconductors on April 25, 2025 and sell it today you would earn a total of  4,304  from holding ProShares Ultra Semiconductors or generate 108.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.39%
Values	Daily Returns

ProShares Ultra Semiconductors  vs.  SPDR Barclays Intermediate

ProShares Ultra Semi

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares Ultra Semiconductors are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, ProShares Ultra exhibited solid returns over the last few months and may actually be approaching a breakup point.

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 13 (%) 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.

Pair Trading with ProShares Ultra and SPDR Barclays

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

The idea behind ProShares Ultra Semiconductors and SPDR Barclays Intermediate 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.