Correlation Between ProShares Ultra and Goldman Sachs

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

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

Diversification Opportunities for ProShares Ultra and Goldman Sachs

-0.78

Correlation Coefficient

ProShares Ultra  Goldman Sachs

Pay attention - limited upside

The 3 months correlation between ProShares and Goldman is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Euro and Goldman Sachs ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs ETF 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 Euro are associated (or correlated) with Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs ETF has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Goldman Sachs go up and down completely randomly.

Pair Corralation between ProShares Ultra and Goldman Sachs

Considering the 90-day investment horizon ProShares Ultra Euro is expected to generate 0.73 times more return on investment than Goldman Sachs. However, ProShares Ultra Euro is 1.37 times less risky than Goldman Sachs. It trades about 0.2 of its potential returns per unit of risk. Goldman Sachs ETF is currently generating about -0.11 per unit of risk. If you would invest  1,045  in ProShares Ultra Euro on January 31, 2025 and sell it today you would earn a total of  206.00  from holding ProShares Ultra Euro or generate 19.71% return on investment over 90 days.

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

ProShares Ultra Euro  vs.  Goldman Sachs ETF

ProShares Ultra Euro

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares Ultra Euro are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting essential indicators, ProShares Ultra exhibited solid returns over the last few months and may actually be approaching a breakup point.

Goldman Sachs ETF

Risk-Adjusted Performance

Very Weak

Over the last 90 days Goldman Sachs ETF has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Etf's basic indicators remain rather sound which may send shares a bit higher in June 2025. The latest tumult may also be a sign of longer-term up-swing for the fund shareholders.

Pair Trading with ProShares Ultra and Goldman Sachs

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

The idea behind ProShares Ultra Euro and Goldman Sachs ETF 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.