Correlation Between ProShares Trust and VanEck Ethereum
Can any of the company-specific risk be diversified away by investing in both ProShares Trust and VanEck Ethereum 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 Trust and VanEck Ethereum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Trust and VanEck Ethereum ETF, you can compare the effects of market volatilities on ProShares Trust and VanEck Ethereum 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 Trust with a short position of VanEck Ethereum. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Trust and VanEck Ethereum.
Diversification Opportunities for ProShares Trust and VanEck Ethereum
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ProShares and VanEck is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Trust and VanEck Ethereum ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Ethereum ETF and ProShares Trust 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 Trust are associated (or correlated) with VanEck Ethereum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Ethereum ETF has no effect on the direction of ProShares Trust i.e., ProShares Trust and VanEck Ethereum go up and down completely randomly.
Pair Corralation between ProShares Trust and VanEck Ethereum
Given the investment horizon of 90 days ProShares Trust is expected to generate 0.79 times more return on investment than VanEck Ethereum. However, ProShares Trust is 1.26 times less risky than VanEck Ethereum. It trades about 0.07 of its potential returns per unit of risk. VanEck Ethereum ETF is currently generating about 0.03 per unit of risk. If you would invest 7,353 in ProShares Trust on September 1, 2024 and sell it today you would earn a total of 1,838 from holding ProShares Trust or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 72.44% |
| Values | Daily Returns |
ProShares Trust vs. VanEck Ethereum ETF
Performance |
| Timeline |
| ProShares Trust |
| VanEck Ethereum ETF |
ProShares Trust and VanEck Ethereum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Trust and VanEck Ethereum
The main advantage of trading using opposite ProShares Trust and VanEck Ethereum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Trust position performs unexpectedly, VanEck Ethereum 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 VanEck Ethereum will offset losses from the drop in VanEck Ethereum's long position.| ProShares Trust vs. ProShares Trust | ProShares Trust vs. iShares Ethereum Trust | ProShares Trust vs. ProShares Trust | ProShares Trust vs. Grayscale Ethereum Trust |
| VanEck Ethereum vs. ProShares Trust | VanEck Ethereum vs. iShares Ethereum Trust | VanEck Ethereum vs. ProShares Trust | VanEck Ethereum vs. Grayscale Ethereum Trust |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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