Correlation Between ProShares Bitcoin and SPDR SP
Can any of the company-specific risk be diversified away by investing in both ProShares Bitcoin and SPDR SP 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 SPDR SP 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 SPDR SP World, you can compare the effects of market volatilities on ProShares Bitcoin and SPDR SP 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 SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Bitcoin and SPDR SP.
Diversification Opportunities for ProShares Bitcoin and SPDR SP
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ProShares and SPDR is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Bitcoin Strategy and SPDR SP World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP World 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 SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP World has no effect on the direction of ProShares Bitcoin i.e., ProShares Bitcoin and SPDR SP go up and down completely randomly.
Pair Corralation between ProShares Bitcoin and SPDR SP
Given the investment horizon of 90 days ProShares Bitcoin Strategy is expected to generate 4.35 times more return on investment than SPDR SP. However, ProShares Bitcoin is 4.35 times more volatile than SPDR SP World. It trades about 0.09 of its potential returns per unit of risk. SPDR SP World is currently generating about 0.07 per unit of risk. If you would invest 2,341 in ProShares Bitcoin Strategy on October 26, 2024 and sell it today you would earn a total of 243.00 from holding ProShares Bitcoin Strategy or generate 10.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Bitcoin Strategy vs. SPDR SP World
Performance |
| Timeline |
| ProShares Bitcoin |
| SPDR SP World |
ProShares Bitcoin and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Bitcoin and SPDR SP
The main advantage of trading using opposite ProShares Bitcoin and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Bitcoin position performs unexpectedly, SPDR SP 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 SPDR SP will offset losses from the drop in SPDR SP'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 |
| SPDR SP vs. SPDR Portfolio Emerging | SPDR SP vs. SPDR Portfolio SP | SPDR SP vs. SPDR Portfolio SP | SPDR SP vs. SPDR Russell Small |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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