Correlation Between ProShares Trust and Grayscale Bitcoin
Can any of the company-specific risk be diversified away by investing in both ProShares Trust and Grayscale 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 Grayscale 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 Grayscale Bitcoin Trust, you can compare the effects of market volatilities on ProShares Trust and Grayscale 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 Grayscale Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Trust and Grayscale Bitcoin.
Diversification Opportunities for ProShares Trust and Grayscale Bitcoin
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ProShares and Grayscale is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Trust and Grayscale Bitcoin Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grayscale Bitcoin Trust 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 Grayscale Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grayscale Bitcoin Trust has no effect on the direction of ProShares Trust i.e., ProShares Trust and Grayscale Bitcoin go up and down completely randomly.
Pair Corralation between ProShares Trust and Grayscale Bitcoin
Given the investment horizon of 90 days ProShares Trust is expected to generate 1.37 times less return on investment than Grayscale Bitcoin. In addition to that, ProShares Trust is 1.31 times more volatile than Grayscale Bitcoin Trust. It trades about 0.25 of its total potential returns per unit of risk. Grayscale Bitcoin Trust is currently generating about 0.45 per unit of volatility. If you would invest 5,432 in Grayscale Bitcoin Trust on August 25, 2024 and sell it today you would earn a total of 2,455 from holding Grayscale Bitcoin Trust or generate 45.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Trust vs. Grayscale Bitcoin Trust
Performance |
| Timeline |
| ProShares Trust |
| Grayscale Bitcoin Trust |
ProShares Trust and Grayscale Bitcoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Trust and Grayscale Bitcoin
The main advantage of trading using opposite ProShares Trust and Grayscale Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Trust position performs unexpectedly, Grayscale 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 Grayscale Bitcoin will offset losses from the drop in Grayscale Bitcoin's long position.| ProShares Trust vs. Grayscale Bitcoin Trust | ProShares Trust vs. Siren Nasdaq NexGen | ProShares Trust vs. First Trust Indxx | ProShares Trust vs. Bitwise Crypto Industry |
| Grayscale Bitcoin vs. Grayscale Ethereum Trust | Grayscale Bitcoin vs. Riot Blockchain | Grayscale Bitcoin vs. Marathon Digital Holdings | Grayscale Bitcoin vs. Coinbase Global |
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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