Correlation Between Global X and ProShares Bitcoin
Can any of the company-specific risk be diversified away by investing in both Global X 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 Global X and ProShares Bitcoin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Blockchain and ProShares Bitcoin Strategy, you can compare the effects of market volatilities on Global X 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 Global X with a short position of ProShares Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and ProShares Bitcoin.
Diversification Opportunities for Global X and ProShares Bitcoin
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Global and ProShares is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Global X Blockchain and ProShares Bitcoin Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Bitcoin and Global X 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 Global X Blockchain 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 Global X i.e., Global X and ProShares Bitcoin go up and down completely randomly.
Pair Corralation between Global X and ProShares Bitcoin
Given the investment horizon of 90 days Global X is expected to generate 1.8 times less return on investment than ProShares Bitcoin. In addition to that, Global X is 1.68 times more volatile than ProShares Bitcoin Strategy. It trades about 0.14 of its total potential returns per unit of risk. ProShares Bitcoin Strategy is currently generating about 0.43 per unit of volatility. If you would invest 1,823 in ProShares Bitcoin Strategy on August 23, 2024 and sell it today you would earn a total of 820.00 from holding ProShares Bitcoin Strategy or generate 44.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Blockchain vs. ProShares Bitcoin Strategy
Performance |
| Timeline |
| Global X Blockchain |
| ProShares Bitcoin |
Global X and ProShares Bitcoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and ProShares Bitcoin
The main advantage of trading using opposite Global X and ProShares Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X 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.| Global X vs. Vanguard Industrials Index | Global X vs. Vanguard Consumer Discretionary | Global X vs. Vanguard Materials Index | Global X vs. Vanguard Health Care |
| 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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