Correlation Between ProShares Trust and BTCI
Can any of the company-specific risk be diversified away by investing in both ProShares Trust and BTCI 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 BTCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Trust and BTCI, you can compare the effects of market volatilities on ProShares Trust and BTCI 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 BTCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Trust and BTCI.
Diversification Opportunities for ProShares Trust and BTCI
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ProShares and BTCI is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Trust and BTCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTCI 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 BTCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTCI has no effect on the direction of ProShares Trust i.e., ProShares Trust and BTCI go up and down completely randomly.
Pair Corralation between ProShares Trust and BTCI
Given the investment horizon of 90 days ProShares Trust is expected to under-perform the BTCI. In addition to that, ProShares Trust is 1.36 times more volatile than BTCI. It trades about -0.01 of its total potential returns per unit of risk. BTCI is currently generating about 0.12 per unit of volatility. If you would invest 6,065 in BTCI on October 9, 2024 and sell it today you would earn a total of 362.00 from holding BTCI or generate 5.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Trust vs. BTCI
Performance |
| Timeline |
| ProShares Trust |
| BTCI |
ProShares Trust and BTCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Trust and BTCI
The main advantage of trading using opposite ProShares Trust and BTCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Trust position performs unexpectedly, BTCI 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 BTCI will offset losses from the drop in BTCI'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 |
| BTCI vs. ProShares Trust | BTCI vs. iShares Ethereum Trust | BTCI vs. ProShares Trust | BTCI 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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