Correlation Between WisdomTree Continuous and ProShares UltraShort

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

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

Diversification Opportunities for WisdomTree Continuous and ProShares UltraShort

-0.43

Correlation Coefficient

WisdomTree Continuous  ProShares UltraShort

Very good diversification

The 3 months correlation between WisdomTree and ProShares is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Continuous Commodit and ProShares UltraShort Bloomberg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort and WisdomTree Continuous 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 WisdomTree Continuous Commodity 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 WisdomTree Continuous i.e., WisdomTree Continuous and ProShares UltraShort go up and down completely randomly.

Pair Corralation between WisdomTree Continuous and ProShares UltraShort

Considering the 90-day investment horizon WisdomTree Continuous Commodity is expected to generate 0.17 times more return on investment than ProShares UltraShort. However, WisdomTree Continuous Commodity is 5.76 times less risky than ProShares UltraShort. It trades about 0.08 of its potential returns per unit of risk. ProShares UltraShort Bloomberg is currently generating about -0.11 per unit of risk. If you would invest  1,940  in WisdomTree Continuous Commodity on August 26, 2025 and sell it today you would earn a total of  73.00  from holding WisdomTree Continuous Commodity or generate 3.76% return on investment over 90 days.

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

WisdomTree Continuous Commodit  vs.  ProShares UltraShort Bloomberg

WisdomTree Continuous

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in WisdomTree Continuous Commodity are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, WisdomTree Continuous is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

ProShares UltraShort

Risk-Adjusted Performance

Weakest

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 essential indicators remain rather sound which may send shares a bit higher in December 2025. The latest tumult may also be a sign of longer-term up-swing for the fund shareholders.

Pair Trading with WisdomTree Continuous and ProShares UltraShort

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

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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.