Correlation Between ProShares Ultra and Strategy Shares

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

By analyzing existing cross correlation between ProShares Ultra Yen and Strategy Shares NewfoundReSolve, you can compare the effects of market volatilities on ProShares Ultra and Strategy Shares 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 Strategy Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and Strategy Shares.

Diversification Opportunities for ProShares Ultra and Strategy Shares

-0.65

Correlation Coefficient

ProShares Ultra  Strategy Shares

Excellent diversification

The 3 months correlation between ProShares and Strategy is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Yen and Strategy Shares NewfoundReSolv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategy Shares Newf 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 Yen are associated (or correlated) with Strategy Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategy Shares Newf has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Strategy Shares go up and down completely randomly.

Pair Corralation between ProShares Ultra and Strategy Shares

Considering the 90-day investment horizon ProShares Ultra Yen is expected to under-perform the Strategy Shares. In addition to that, ProShares Ultra is 1.77 times more volatile than Strategy Shares NewfoundReSolve. It trades about -0.08 of its total potential returns per unit of risk. Strategy Shares NewfoundReSolve is currently generating about 0.14 per unit of volatility. If you would invest  3,128  in Strategy Shares NewfoundReSolve on May 27, 2025 and sell it today you would earn a total of  183.00  from holding Strategy Shares NewfoundReSolve or generate 5.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

ProShares Ultra Yen  vs.  Strategy Shares NewfoundReSolv

ProShares Ultra Yen

Risk-Adjusted Performance

Weakest

Over the last 90 days ProShares Ultra Yen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, ProShares Ultra is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Strategy Shares Newf

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Strategy Shares NewfoundReSolve are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy primary indicators, Strategy Shares is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with ProShares Ultra and Strategy Shares

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

The idea behind ProShares Ultra Yen and Strategy Shares NewfoundReSolve 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.