Correlation Between VanEck Digital and ProShares Bitcoin
Can any of the company-specific risk be diversified away by investing in both VanEck Digital 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 VanEck Digital and ProShares Bitcoin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Digital Transformation and ProShares Bitcoin Strategy, you can compare the effects of market volatilities on VanEck Digital 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 VanEck Digital with a short position of ProShares Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Digital and ProShares Bitcoin.
Diversification Opportunities for VanEck Digital and ProShares Bitcoin
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between VanEck and ProShares is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Digital Transformation and ProShares Bitcoin Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Bitcoin and VanEck Digital 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 VanEck Digital Transformation 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 VanEck Digital i.e., VanEck Digital and ProShares Bitcoin go up and down completely randomly.
Pair Corralation between VanEck Digital and ProShares Bitcoin
Given the investment horizon of 90 days VanEck Digital Transformation is expected to generate 1.33 times more return on investment than ProShares Bitcoin. However, VanEck Digital is 1.33 times more volatile than ProShares Bitcoin Strategy. It trades about 0.1 of its potential returns per unit of risk. ProShares Bitcoin Strategy is currently generating about 0.11 per unit of risk. If you would invest 751.00 in VanEck Digital Transformation on August 27, 2024 and sell it today you would earn a total of 1,096 from holding VanEck Digital Transformation or generate 145.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Digital Transformation vs. ProShares Bitcoin Strategy
Performance |
| Timeline |
| VanEck Digital Trans |
| ProShares Bitcoin |
VanEck Digital and ProShares Bitcoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Digital and ProShares Bitcoin
The main advantage of trading using opposite VanEck Digital and ProShares Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Digital 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.| VanEck Digital vs. Grayscale Bitcoin Trust | VanEck Digital vs. Siren Nasdaq NexGen | VanEck Digital vs. Grayscale Bitcoin Mini | VanEck Digital vs. First Trust SkyBridge |
| ProShares Bitcoin vs. Grayscale Bitcoin Trust | ProShares Bitcoin vs. Siren Nasdaq NexGen | ProShares Bitcoin vs. Grayscale Bitcoin Mini | ProShares Bitcoin vs. First Trust SkyBridge |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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