Correlation Between ProShares Trust and Bitwise Bitcoin
Can any of the company-specific risk be diversified away by investing in both ProShares Trust and Bitwise 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 ProShares Trust and Bitwise Bitcoin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Trust and Bitwise Bitcoin ETF, you can compare the effects of market volatilities on ProShares Trust and Bitwise 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 ProShares Trust with a short position of Bitwise Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Trust and Bitwise Bitcoin.
Diversification Opportunities for ProShares Trust and Bitwise Bitcoin
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ProShares and Bitwise is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Trust and Bitwise Bitcoin ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitwise Bitcoin ETF and ProShares Trust 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 Trust are associated (or correlated) with Bitwise Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitwise Bitcoin ETF has no effect on the direction of ProShares Trust i.e., ProShares Trust and Bitwise Bitcoin go up and down completely randomly.
Pair Corralation between ProShares Trust and Bitwise Bitcoin
Given the investment horizon of 90 days ProShares Trust is expected to generate 1.42 times less return on investment than Bitwise Bitcoin. In addition to that, ProShares Trust is 1.11 times more volatile than Bitwise Bitcoin ETF. It trades about 0.07 of its total potential returns per unit of risk. Bitwise Bitcoin ETF is currently generating about 0.11 per unit of volatility. If you would invest 2,554 in Bitwise Bitcoin ETF on August 26, 2024 and sell it today you would earn a total of 2,856 from holding Bitwise Bitcoin ETF or generate 111.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 75.95% |
| Values | Daily Returns |
ProShares Trust vs. Bitwise Bitcoin ETF
Performance |
| Timeline |
| ProShares Trust |
| Bitwise Bitcoin ETF |
ProShares Trust and Bitwise Bitcoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Trust and Bitwise Bitcoin
The main advantage of trading using opposite ProShares Trust and Bitwise Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Trust position performs unexpectedly, Bitwise 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 Bitwise Bitcoin will offset losses from the drop in Bitwise Bitcoin's long position.| ProShares Trust vs. iShares Ethereum Trust | ProShares Trust vs. ProShares Trust | ProShares Trust vs. Grayscale Ethereum Trust | ProShares Trust vs. ProShares Trust |
| Bitwise Bitcoin vs. ProShares Trust | Bitwise Bitcoin vs. iShares Ethereum Trust | Bitwise Bitcoin vs. ProShares Trust | Bitwise Bitcoin vs. Grayscale Ethereum Trust |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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