Correlation Between ProShares Bitcoin and Roundhill Ether
Can any of the company-specific risk be diversified away by investing in both ProShares Bitcoin and Roundhill Ether 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 Roundhill Ether 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 Roundhill Ether Covered, you can compare the effects of market volatilities on ProShares Bitcoin and Roundhill Ether 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 Roundhill Ether. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Bitcoin and Roundhill Ether.
Diversification Opportunities for ProShares Bitcoin and Roundhill Ether
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ProShares and Roundhill is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Bitcoin Strategy and Roundhill Ether Covered in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roundhill Ether Covered 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 Roundhill Ether. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roundhill Ether Covered has no effect on the direction of ProShares Bitcoin i.e., ProShares Bitcoin and Roundhill Ether go up and down completely randomly.
Pair Corralation between ProShares Bitcoin and Roundhill Ether
Given the investment horizon of 90 days ProShares Bitcoin Strategy is expected to generate 1.3 times more return on investment than Roundhill Ether. However, ProShares Bitcoin is 1.3 times more volatile than Roundhill Ether Covered. It trades about 0.11 of its potential returns per unit of risk. Roundhill Ether Covered is currently generating about 0.1 per unit of risk. If you would invest 518.00 in ProShares Bitcoin Strategy on August 23, 2024 and sell it today you would earn a total of 2,024 from holding ProShares Bitcoin Strategy or generate 390.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 11.49% |
| Values | Daily Returns |
ProShares Bitcoin Strategy vs. Roundhill Ether Covered
Performance |
| Timeline |
| ProShares Bitcoin |
| Roundhill Ether Covered |
ProShares Bitcoin and Roundhill Ether Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Bitcoin and Roundhill Ether
The main advantage of trading using opposite ProShares Bitcoin and Roundhill Ether positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Bitcoin position performs unexpectedly, Roundhill Ether 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 Roundhill Ether will offset losses from the drop in Roundhill Ether'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 |
| Roundhill Ether vs. ProShares Bitcoin Strategy | Roundhill Ether vs. Bitwise 10 Crypto | Roundhill Ether 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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