Correlation Between Volatility Shares and ProShares Bitcoin
Can any of the company-specific risk be diversified away by investing in both Volatility Shares and ProShares Bitcoin 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 Volatility Shares and ProShares Bitcoin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Volatility Shares Trust and ProShares Bitcoin Strategy, you can compare the effects of market volatilities on Volatility Shares and ProShares Bitcoin 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 Volatility Shares with a short position of ProShares Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volatility Shares and ProShares Bitcoin.
Diversification Opportunities for Volatility Shares and ProShares Bitcoin
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Volatility and ProShares is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Volatility Shares Trust and ProShares Bitcoin Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Bitcoin and Volatility Shares 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 Volatility Shares Trust are associated (or correlated) with ProShares Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Bitcoin has no effect on the direction of Volatility Shares i.e., Volatility Shares and ProShares Bitcoin go up and down completely randomly.
Pair Corralation between Volatility Shares and ProShares Bitcoin
Given the investment horizon of 90 days Volatility Shares Trust is expected to generate 2.0 times more return on investment than ProShares Bitcoin. However, Volatility Shares is 2.0 times more volatile than ProShares Bitcoin Strategy. It trades about 0.09 of its potential returns per unit of risk. ProShares Bitcoin Strategy is currently generating about 0.09 per unit of risk. If you would invest 3,991 in Volatility Shares Trust on August 24, 2024 and sell it today you would earn a total of 2,296 from holding Volatility Shares Trust or generate 57.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Volatility Shares Trust vs. ProShares Bitcoin Strategy
Performance |
| Timeline |
| Volatility Shares Trust |
| ProShares Bitcoin |
Volatility Shares and ProShares Bitcoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volatility Shares and ProShares Bitcoin
The main advantage of trading using opposite Volatility Shares and ProShares Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volatility Shares position performs unexpectedly, ProShares Bitcoin 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 Bitcoin will offset losses from the drop in ProShares Bitcoin's long position.| Volatility Shares vs. ProShares Bitcoin Strategy | Volatility Shares vs. Bitwise 10 Crypto | Volatility Shares vs. Global X Blockchain |
| ProShares Bitcoin vs. Grayscale Bitcoin Trust | ProShares Bitcoin vs. Grayscale Ethereum Trust | ProShares Bitcoin vs. Coinbase Global | ProShares Bitcoin vs. Valkyrie Bitcoin Strategy |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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