Correlation Between ProShares Ultra and Bitwise Funds
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and Bitwise Funds 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 ProShares Ultra and Bitwise Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Ultra Oil and Bitwise Funds Trust, you can compare the effects of market volatilities on ProShares Ultra and Bitwise Funds 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 ProShares Ultra with a short position of Bitwise Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and Bitwise Funds.
Diversification Opportunities for ProShares Ultra and Bitwise Funds
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ProShares and Bitwise is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Oil and Bitwise Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitwise Funds Trust and ProShares Ultra 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 ProShares Ultra Oil are associated (or correlated) with Bitwise Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitwise Funds Trust has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Bitwise Funds go up and down completely randomly.
Pair Corralation between ProShares Ultra and Bitwise Funds
Considering the 90-day investment horizon ProShares Ultra is expected to generate 1.1 times less return on investment than Bitwise Funds. But when comparing it to its historical volatility, ProShares Ultra Oil is 1.26 times less risky than Bitwise Funds. It trades about 0.31 of its potential returns per unit of risk. Bitwise Funds Trust is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 5,014 in Bitwise Funds Trust on August 30, 2024 and sell it today you would earn a total of 865.00 from holding Bitwise Funds Trust or generate 17.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra Oil vs. Bitwise Funds Trust
Performance |
| Timeline |
| ProShares Ultra Oil |
| Bitwise Funds Trust |
ProShares Ultra and Bitwise Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and Bitwise Funds
The main advantage of trading using opposite ProShares Ultra and Bitwise Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, Bitwise Funds 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 Bitwise Funds will offset losses from the drop in Bitwise Funds' long position.| ProShares Ultra vs. ProShares UltraShort Oil | ProShares Ultra vs. ProShares Ultra Basic | ProShares Ultra vs. ProShares Ultra Financials | ProShares Ultra vs. ProShares Ultra Real |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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