Correlation Between ProShares Bitcoin and IShares Bitcoin
Can any of the company-specific risk be diversified away by investing in both ProShares Bitcoin and IShares Bitcoin 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 IShares Bitcoin 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 iShares Bitcoin Trust, you can compare the effects of market volatilities on ProShares Bitcoin and IShares Bitcoin 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 IShares Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Bitcoin and IShares Bitcoin.
Diversification Opportunities for ProShares Bitcoin and IShares Bitcoin
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between ProShares and IShares is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Bitcoin Strategy and iShares Bitcoin Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Bitcoin Trust 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 IShares Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Bitcoin Trust has no effect on the direction of ProShares Bitcoin i.e., ProShares Bitcoin and IShares Bitcoin go up and down completely randomly.
Pair Corralation between ProShares Bitcoin and IShares Bitcoin
Given the investment horizon of 90 days ProShares Bitcoin is expected to generate 1.01 times less return on investment than IShares Bitcoin. But when comparing it to its historical volatility, ProShares Bitcoin Strategy is 1.0 times less risky than IShares Bitcoin. It trades about 0.48 of its potential returns per unit of risk. iShares Bitcoin Trust is currently generating about 0.48 of returns per unit of risk over similar time horizon. If you would invest 3,801 in iShares Bitcoin Trust on August 26, 2024 and sell it today you would earn a total of 1,848 from holding iShares Bitcoin Trust or generate 48.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Bitcoin Strategy vs. iShares Bitcoin Trust
Performance |
| Timeline |
| ProShares Bitcoin |
| iShares Bitcoin Trust |
ProShares Bitcoin and IShares Bitcoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Bitcoin and IShares Bitcoin
The main advantage of trading using opposite ProShares Bitcoin and IShares Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Bitcoin position performs unexpectedly, IShares Bitcoin 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 IShares Bitcoin will offset losses from the drop in IShares Bitcoin's long position.| ProShares Bitcoin vs. Grayscale Bitcoin Trust | ProShares Bitcoin vs. Siren Nasdaq NexGen | ProShares Bitcoin vs. Grayscale Bitcoin Mini | ProShares Bitcoin vs. First Trust SkyBridge |
| IShares Bitcoin vs. ProShares Trust | IShares Bitcoin vs. iShares Ethereum Trust | IShares Bitcoin vs. ProShares Trust | IShares Bitcoin 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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