Correlation Between ProShares Ultra and ProShares UltraShort

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

By analyzing existing cross correlation between ProShares Ultra Industrials and ProShares UltraShort Russell2000, you can compare the effects of market volatilities on ProShares Ultra 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 ProShares Ultra with a short position of ProShares UltraShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and ProShares UltraShort.

Diversification Opportunities for ProShares Ultra and ProShares UltraShort

-0.45

Correlation Coefficient

ProShares Ultra  ProShares UltraShort

Very good diversification

The 3 months correlation between ProShares and ProShares is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Industrials and ProShares UltraShort Russell20 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort 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 Industrials 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 ProShares Ultra i.e., ProShares Ultra and ProShares UltraShort go up and down completely randomly.

Pair Corralation between ProShares Ultra and ProShares UltraShort

Considering the 90-day investment horizon ProShares Ultra Industrials is expected to generate 0.63 times more return on investment than ProShares UltraShort. However, ProShares Ultra Industrials is 1.59 times less risky than ProShares UltraShort. It trades about 0.05 of its potential returns per unit of risk. ProShares UltraShort Russell2000 is currently generating about -0.15 per unit of risk. If you would invest  4,530  in ProShares Ultra Industrials on July 30, 2025 and sell it today you would earn a total of  195.00  from holding ProShares Ultra Industrials or generate 4.3% return on investment over 90 days.

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

ProShares Ultra Industrials  vs.  ProShares UltraShort Russell20

ProShares Ultra Indu

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares Ultra Industrials are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, ProShares Ultra is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

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 unfluctuating performance in the last few months, the Etf's basic indicators remain very healthy which may send shares a bit higher in November 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

Pair Trading with ProShares Ultra and ProShares UltraShort

The main advantage of trading using opposite ProShares Ultra and ProShares UltraShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra 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 ProShares Ultra Industrials and ProShares UltraShort Russell2000 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.