Correlation Between Bitwise Crypto and ProShares Trust
Can any of the company-specific risk be diversified away by investing in both Bitwise Crypto and ProShares 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 Bitwise Crypto and ProShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitwise Crypto Industry and ProShares Trust, you can compare the effects of market volatilities on Bitwise Crypto and ProShares 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 Bitwise Crypto with a short position of ProShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitwise Crypto and ProShares Trust.
Diversification Opportunities for Bitwise Crypto and ProShares Trust
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bitwise and ProShares is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Bitwise Crypto Industry and ProShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Trust and Bitwise Crypto 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 Bitwise Crypto Industry are associated (or correlated) with ProShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Trust has no effect on the direction of Bitwise Crypto i.e., Bitwise Crypto and ProShares Trust go up and down completely randomly.
Pair Corralation between Bitwise Crypto and ProShares Trust
Given the investment horizon of 90 days Bitwise Crypto Industry is expected to generate 1.07 times more return on investment than ProShares Trust. However, Bitwise Crypto is 1.07 times more volatile than ProShares Trust. It trades about 0.1 of its potential returns per unit of risk. ProShares Trust is currently generating about 0.07 per unit of risk. If you would invest 417.00 in Bitwise Crypto Industry on August 25, 2024 and sell it today you would earn a total of 1,657 from holding Bitwise Crypto Industry or generate 397.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 58.55% |
| Values | Daily Returns |
Bitwise Crypto Industry vs. ProShares Trust
Performance |
| Timeline |
| Bitwise Crypto Industry |
| ProShares Trust |
Bitwise Crypto and ProShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitwise Crypto and ProShares Trust
The main advantage of trading using opposite Bitwise Crypto and ProShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitwise Crypto position performs unexpectedly, ProShares 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 ProShares Trust will offset losses from the drop in ProShares Trust's long position.| Bitwise Crypto vs. Grayscale Bitcoin Trust | Bitwise Crypto vs. Siren Nasdaq NexGen | Bitwise Crypto vs. First Trust Indxx | Bitwise Crypto vs. Simplify Equity PLUS |
| ProShares Trust vs. iShares Ethereum Trust | ProShares Trust vs. ProShares Trust | ProShares Trust vs. Grayscale Ethereum Trust | ProShares Trust vs. ProShares 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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