Correlation Between ProShares Bitcoin and GraniteShares HIPS
Can any of the company-specific risk be diversified away by investing in both ProShares Bitcoin and GraniteShares HIPS 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 Bitcoin and GraniteShares HIPS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Bitcoin Strategy and GraniteShares HIPS High, you can compare the effects of market volatilities on ProShares Bitcoin and GraniteShares HIPS 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 Bitcoin with a short position of GraniteShares HIPS. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Bitcoin and GraniteShares HIPS.
Diversification Opportunities for ProShares Bitcoin and GraniteShares HIPS
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ProShares and GraniteShares is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Bitcoin Strategy and GraniteShares HIPS High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares HIPS High and ProShares Bitcoin 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 Bitcoin Strategy are associated (or correlated) with GraniteShares HIPS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GraniteShares HIPS High has no effect on the direction of ProShares Bitcoin i.e., ProShares Bitcoin and GraniteShares HIPS go up and down completely randomly.
Pair Corralation between ProShares Bitcoin and GraniteShares HIPS
Given the investment horizon of 90 days ProShares Bitcoin Strategy is expected to generate 8.53 times more return on investment than GraniteShares HIPS. However, ProShares Bitcoin is 8.53 times more volatile than GraniteShares HIPS High. It trades about 0.31 of its potential returns per unit of risk. GraniteShares HIPS High is currently generating about 0.48 per unit of risk. If you would invest 1,961 in ProShares Bitcoin Strategy on August 30, 2024 and sell it today you would earn a total of 638.00 from holding ProShares Bitcoin Strategy or generate 32.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Bitcoin Strategy vs. GraniteShares HIPS High
Performance |
| Timeline |
| ProShares Bitcoin |
| GraniteShares HIPS High |
ProShares Bitcoin and GraniteShares HIPS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Bitcoin and GraniteShares HIPS
The main advantage of trading using opposite ProShares Bitcoin and GraniteShares HIPS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Bitcoin position performs unexpectedly, GraniteShares HIPS 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 GraniteShares HIPS will offset losses from the drop in GraniteShares HIPS's long position.| ProShares Bitcoin vs. Grayscale Bitcoin Trust | ProShares Bitcoin vs. Grayscale Ethereum Trust | ProShares Bitcoin vs. Coinbase Global | ProShares Bitcoin vs. Valkyrie Bitcoin Strategy |
| GraniteShares HIPS vs. Amplify BlackSwan Growth | GraniteShares HIPS vs. RPAR Risk Parity | GraniteShares HIPS vs. Pimco Stocksplus Long | GraniteShares HIPS vs. WisdomTree International Efficient |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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