Correlation Between Vanguard Growth and ProShares UltraShort

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

By analyzing existing cross correlation between Vanguard Growth Index and ProShares UltraShort SmallCap600, you can compare the effects of market volatilities on Vanguard Growth 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 Vanguard Growth with a short position of ProShares UltraShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Growth and ProShares UltraShort.

Diversification Opportunities for Vanguard Growth and ProShares UltraShort

-0.78

Correlation Coefficient

Vanguard Growth  ProShares UltraShort

Pay attention - limited upside

The 3 months correlation between Vanguard and ProShares is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Growth Index and ProShares UltraShort SmallCap6 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort and Vanguard Growth 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 Vanguard Growth Index 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 Vanguard Growth i.e., Vanguard Growth and ProShares UltraShort go up and down completely randomly.

Pair Corralation between Vanguard Growth and ProShares UltraShort

Considering the 90-day investment horizon Vanguard Growth Index is expected to under-perform the ProShares UltraShort. But the etf apears to be less risky and, when comparing its historical volatility, Vanguard Growth Index is 2.35 times less risky than ProShares UltraShort. The etf trades about -0.05 of its potential returns per unit of risk. The ProShares UltraShort SmallCap600 is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  1,324  in ProShares UltraShort SmallCap600 on July 15, 2025 and sell it today you would earn a total of  92.00  from holding ProShares UltraShort SmallCap600 or generate 6.95% return on investment over 90 days.

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

Vanguard Growth Index  vs.  ProShares UltraShort SmallCap6

Vanguard Growth Index

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Growth Index are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Vanguard Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

ProShares UltraShort

Risk-Adjusted Performance

Weakest

Over the last 90 days ProShares UltraShort SmallCap600 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, ProShares UltraShort is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Vanguard Growth and ProShares UltraShort

The main advantage of trading using opposite Vanguard Growth and ProShares UltraShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Growth 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 Vanguard Growth Index and ProShares UltraShort SmallCap600 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.