Correlation Between ProShares Trust and Franklin Bitcoin
Can any of the company-specific risk be diversified away by investing in both ProShares Trust and Franklin 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 Franklin 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 Franklin Bitcoin ETF, you can compare the effects of market volatilities on ProShares Trust and Franklin 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 Franklin Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Trust and Franklin Bitcoin.
Diversification Opportunities for ProShares Trust and Franklin Bitcoin
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ProShares and Franklin is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Trust and Franklin Bitcoin ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin 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 Franklin Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Bitcoin ETF has no effect on the direction of ProShares Trust i.e., ProShares Trust and Franklin Bitcoin go up and down completely randomly.
Pair Corralation between ProShares Trust and Franklin Bitcoin
Given the investment horizon of 90 days ProShares Trust is expected to generate 1.23 times less return on investment than Franklin Bitcoin. In addition to that, ProShares Trust is 1.12 times more volatile than Franklin Bitcoin ETF. It trades about 0.08 of its total potential returns per unit of risk. Franklin Bitcoin ETF is currently generating about 0.11 per unit of volatility. If you would invest 2,705 in Franklin Bitcoin ETF on August 30, 2024 and sell it today you would earn a total of 2,903 from holding Franklin Bitcoin ETF or generate 107.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 76.11% |
| Values | Daily Returns |
ProShares Trust vs. Franklin Bitcoin ETF
Performance |
| Timeline |
| ProShares Trust |
| Franklin Bitcoin ETF |
ProShares Trust and Franklin Bitcoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Trust and Franklin Bitcoin
The main advantage of trading using opposite ProShares Trust and Franklin Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Trust position performs unexpectedly, Franklin 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 Franklin Bitcoin will offset losses from the drop in Franklin Bitcoin's long position.| ProShares Trust vs. Grayscale Bitcoin Trust | ProShares Trust vs. ProShares Bitcoin Strategy | ProShares Trust vs. Amplify Transformational Data | ProShares Trust vs. Siren Nasdaq NexGen |
| Franklin Bitcoin vs. ProShares Trust | Franklin Bitcoin vs. iShares Ethereum Trust | Franklin Bitcoin vs. ProShares Trust | Franklin 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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