Correlation Between Bitwise Funds and ProShares Trust
Can any of the company-specific risk be diversified away by investing in both Bitwise Funds 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 Funds 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 Funds Trust and ProShares Trust, you can compare the effects of market volatilities on Bitwise Funds 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 Funds with a short position of ProShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitwise Funds and ProShares Trust.
Diversification Opportunities for Bitwise Funds and ProShares Trust
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bitwise and ProShares is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Bitwise Funds Trust and ProShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Trust and Bitwise Funds 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 Funds Trust 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 Funds i.e., Bitwise Funds and ProShares Trust go up and down completely randomly.
Pair Corralation between Bitwise Funds and ProShares Trust
Given the investment horizon of 90 days Bitwise Funds Trust is expected to generate 0.81 times more return on investment than ProShares Trust. However, Bitwise Funds Trust is 1.23 times less risky than ProShares Trust. It trades about 0.39 of its potential returns per unit of risk. ProShares Trust is currently generating about 0.27 per unit of risk. If you would invest 4,158 in Bitwise Funds Trust on August 26, 2024 and sell it today you would earn a total of 1,668 from holding Bitwise Funds Trust or generate 40.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bitwise Funds Trust vs. ProShares Trust
Performance |
| Timeline |
| Bitwise Funds Trust |
| ProShares Trust |
Bitwise Funds and ProShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitwise Funds and ProShares Trust
The main advantage of trading using opposite Bitwise Funds and ProShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitwise Funds 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 Funds vs. ProShares Trust | Bitwise Funds vs. iShares Ethereum Trust | Bitwise Funds vs. ProShares Trust | Bitwise Funds vs. Grayscale Ethereum Trust |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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