Correlation Between ProShares Bitcoin and Tidal Trust
Can any of the company-specific risk be diversified away by investing in both ProShares Bitcoin and Tidal Trust 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 Tidal Trust 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 Tidal Trust II, you can compare the effects of market volatilities on ProShares Bitcoin and Tidal Trust 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 Tidal Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Bitcoin and Tidal Trust.
Diversification Opportunities for ProShares Bitcoin and Tidal Trust
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ProShares and Tidal is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Bitcoin Strategy and Tidal Trust II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tidal Trust II 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 Tidal Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tidal Trust II has no effect on the direction of ProShares Bitcoin i.e., ProShares Bitcoin and Tidal Trust go up and down completely randomly.
Pair Corralation between ProShares Bitcoin and Tidal Trust
Given the investment horizon of 90 days ProShares Bitcoin is expected to generate 1.36 times less return on investment than Tidal Trust. But when comparing it to its historical volatility, ProShares Bitcoin Strategy is 1.71 times less risky than Tidal Trust. It trades about 0.11 of its potential returns per unit of risk. Tidal Trust II is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 869.00 in Tidal Trust II on August 23, 2024 and sell it today you would earn a total of 681.00 from holding Tidal Trust II or generate 78.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 30.65% |
| Values | Daily Returns |
ProShares Bitcoin Strategy vs. Tidal Trust II
Performance |
| Timeline |
| ProShares Bitcoin |
| Tidal Trust II |
ProShares Bitcoin and Tidal Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Bitcoin and Tidal Trust
The main advantage of trading using opposite ProShares Bitcoin and Tidal Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Bitcoin position performs unexpectedly, Tidal Trust 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 Tidal Trust will offset losses from the drop in Tidal Trust'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 |
| Tidal Trust vs. ProShares Bitcoin Strategy | Tidal Trust vs. Bitwise 10 Crypto | Tidal Trust vs. Global X Blockchain |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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