Correlation Between WEEK and ProShares UltraShort

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

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

Diversification Opportunities for WEEK and ProShares UltraShort

-0.83

Correlation Coefficient

WEEK  ProShares UltraShort

Pay attention - limited upside

The 3 months correlation between WEEK and ProShares is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding WEEK and ProShares UltraShort Bloomberg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort and WEEK 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 WEEK 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 WEEK i.e., WEEK and ProShares UltraShort go up and down completely randomly.

Pair Corralation between WEEK and ProShares UltraShort

Given the investment horizon of 90 days WEEK is expected to generate 0.01 times more return on investment than ProShares UltraShort. However, WEEK is 167.84 times less risky than ProShares UltraShort. It trades about 0.77 of its potential returns per unit of risk. ProShares UltraShort Bloomberg is currently generating about -0.16 per unit of risk. If you would invest  9,908  in WEEK on May 1, 2025 and sell it today you would earn a total of  95.00  from holding WEEK or generate 0.96% return on investment over 90 days.

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

WEEK  vs.  ProShares UltraShort Bloomberg

WEEK

Risk-Adjusted Performance

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in WEEK are ranked lower than 60 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent technical and fundamental indicators, WEEK is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

ProShares UltraShort

Risk-Adjusted Performance

Very Weak

Over the last 90 days ProShares UltraShort Bloomberg 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 fundamental indicators remain very healthy which may send shares a bit higher in August 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

Pair Trading with WEEK and ProShares UltraShort

The main advantage of trading using opposite WEEK and ProShares UltraShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WEEK 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 WEEK and ProShares UltraShort Bloomberg 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.

Check out your portfolio center.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..