Correlation Between ProShares Bitcoin and Proshares Ultrashort
Can any of the company-specific risk be diversified away by investing in both ProShares Bitcoin 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 ProShares Bitcoin and Proshares Ultrashort 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 Proshares Ultrashort Bitcoin, you can compare the effects of market volatilities on ProShares Bitcoin 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 ProShares Bitcoin with a short position of Proshares Ultrashort. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Bitcoin and Proshares Ultrashort.
Diversification Opportunities for ProShares Bitcoin and Proshares Ultrashort
-0.97 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and Proshares is -0.97. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Bitcoin Strategy and Proshares Ultrashort Bitcoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Proshares Ultrashort 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 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 ProShares Bitcoin i.e., ProShares Bitcoin and Proshares Ultrashort go up and down completely randomly.
Pair Corralation between ProShares Bitcoin and Proshares Ultrashort
Given the investment horizon of 90 days ProShares Bitcoin Strategy is expected to generate 0.5 times more return on investment than Proshares Ultrashort. However, ProShares Bitcoin Strategy is 1.98 times less risky than Proshares Ultrashort. It trades about 0.22 of its potential returns per unit of risk. Proshares Ultrashort Bitcoin is currently generating about -0.22 per unit of risk. If you would invest 1,717 in ProShares Bitcoin Strategy on August 26, 2024 and sell it today you would earn a total of 952.00 from holding ProShares Bitcoin Strategy or generate 55.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Bitcoin Strategy vs. Proshares Ultrashort Bitcoin
Performance |
| Timeline |
| ProShares Bitcoin |
| Proshares Ultrashort |
ProShares Bitcoin and Proshares Ultrashort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Bitcoin and Proshares Ultrashort
The main advantage of trading using opposite ProShares Bitcoin and Proshares Ultrashort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Bitcoin 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.| ProShares Bitcoin vs. Grayscale Bitcoin Trust | ProShares Bitcoin vs. Siren Nasdaq NexGen | ProShares Bitcoin vs. Grayscale Bitcoin Mini | ProShares Bitcoin vs. First Trust SkyBridge |
| Proshares Ultrashort vs. Grayscale Bitcoin Trust | Proshares Ultrashort vs. Siren Nasdaq NexGen | Proshares Ultrashort vs. Grayscale Bitcoin Mini | Proshares Ultrashort vs. First Trust SkyBridge |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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