Correlation Between ProShares UltraShort and ProShares Ultra

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Can any of the company-specific risk be diversified away by investing in both ProShares UltraShort and ProShares Ultra 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 UltraShort and ProShares Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares UltraShort Silver and ProShares Ultra Bloomberg, you can compare the effects of market volatilities on ProShares UltraShort and ProShares Ultra 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 UltraShort with a short position of ProShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraShort and ProShares Ultra.

Diversification Opportunities for ProShares UltraShort and ProShares Ultra

0.66
  Correlation Coefficient

Poor diversification

The 3 months correlation between ProShares and ProShares is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraShort Silver and ProShares Ultra Bloomberg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Ultra Bloomberg and ProShares UltraShort 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 UltraShort Silver are associated (or correlated) with ProShares Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Ultra Bloomberg has no effect on the direction of ProShares UltraShort i.e., ProShares UltraShort and ProShares Ultra go up and down completely randomly.

Pair Corralation between ProShares UltraShort and ProShares Ultra

Considering the 90-day investment horizon ProShares UltraShort Silver is expected to generate 0.49 times more return on investment than ProShares Ultra. However, ProShares UltraShort Silver is 2.02 times less risky than ProShares Ultra. It trades about -0.14 of its potential returns per unit of risk. ProShares Ultra Bloomberg is currently generating about -0.07 per unit of risk. If you would invest  3,130  in ProShares UltraShort Silver on April 29, 2025 and sell it today you would lose (839.00) from holding ProShares UltraShort Silver or give up 26.81% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

ProShares UltraShort Silver  vs.  ProShares Ultra Bloomberg

 Performance 
       Timeline  
ProShares UltraShort 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days ProShares UltraShort Silver has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Etf's basic indicators remain quite persistent which may send shares a bit higher in August 2025. The latest mess may also be a sign of long-standing up-swing for the ETF venture institutional investors.
ProShares Ultra Bloomberg 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days ProShares Ultra Bloomberg has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Etf's forward indicators remain quite persistent which may send shares a bit higher in August 2025. The latest mess may also be a sign of long-standing up-swing for the ETF venture institutional investors.

ProShares UltraShort and ProShares Ultra Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ProShares UltraShort and ProShares Ultra

The main advantage of trading using opposite ProShares UltraShort and ProShares Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraShort position performs unexpectedly, ProShares Ultra 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 Ultra will offset losses from the drop in ProShares Ultra's long position.
The idea behind ProShares UltraShort Silver and ProShares Ultra 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.

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