Correlation Between VivoPower International and ProShares UltraShort

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

By analyzing existing cross correlation between VivoPower International PLC and ProShares UltraShort Dow30, you can compare the effects of market volatilities on VivoPower International 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 VivoPower International with a short position of ProShares UltraShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of VivoPower International and ProShares UltraShort.

Diversification Opportunities for VivoPower International and ProShares UltraShort

0.03

Correlation Coefficient

VivoPower International  ProShares UltraShort

Significant diversification

The 3 months correlation between VivoPower and ProShares is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding VivoPower International PLC and ProShares UltraShort Dow30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort and VivoPower International 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 VivoPower International PLC 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 VivoPower International i.e., VivoPower International and ProShares UltraShort go up and down completely randomly.

Pair Corralation between VivoPower International and ProShares UltraShort

Given the investment horizon of 90 days VivoPower International PLC is expected to under-perform the ProShares UltraShort. In addition to that, VivoPower International is 5.93 times more volatile than ProShares UltraShort Dow30. It trades about -0.04 of its total potential returns per unit of risk. ProShares UltraShort Dow30 is currently generating about -0.08 per unit of volatility. If you would invest  2,380  in ProShares UltraShort Dow30 on July 20, 2025 and sell it today you would lose (154.00) from holding ProShares UltraShort Dow30 or give up 6.47% of portfolio value over 90 days.

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

VivoPower International PLC  vs.  ProShares UltraShort Dow30

VivoPower International

Risk-Adjusted Performance

Weakest

Over the last 90 days VivoPower International PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in November 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

ProShares UltraShort

Risk-Adjusted Performance

Weakest

Over the last 90 days ProShares UltraShort Dow30 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, ProShares UltraShort is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with VivoPower International and ProShares UltraShort

The main advantage of trading using opposite VivoPower International and ProShares UltraShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VivoPower International 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 VivoPower International PLC and ProShares UltraShort Dow30 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.