Correlation Between ProShares Trust and IShares Bitcoin
Can any of the company-specific risk be diversified away by investing in both ProShares Trust and IShares 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 IShares 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 iShares Bitcoin Trust, you can compare the effects of market volatilities on ProShares Trust and IShares 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 IShares Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Trust and IShares Bitcoin.
Diversification Opportunities for ProShares Trust and IShares Bitcoin
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ProShares and IShares is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Trust and iShares Bitcoin Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares 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 IShares Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Bitcoin Trust has no effect on the direction of ProShares Trust i.e., ProShares Trust and IShares Bitcoin go up and down completely randomly.
Pair Corralation between ProShares Trust and IShares Bitcoin
Given the investment horizon of 90 days ProShares Trust is expected to generate 1.3 times more return on investment than IShares Bitcoin. However, ProShares Trust is 1.3 times more volatile than iShares Bitcoin Trust. It trades about 0.28 of its potential returns per unit of risk. iShares Bitcoin Trust is currently generating about 0.32 per unit of risk. If you would invest 5,285 in ProShares Trust on August 30, 2024 and sell it today you would earn a total of 1,994 from holding ProShares Trust or generate 37.73% 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. iShares Bitcoin Trust
Performance |
| Timeline |
| ProShares Trust |
| iShares Bitcoin Trust |
ProShares Trust and IShares Bitcoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Trust and IShares Bitcoin
The main advantage of trading using opposite ProShares Trust and IShares Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Trust position performs unexpectedly, IShares 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 IShares Bitcoin will offset losses from the drop in IShares 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 |
| IShares Bitcoin vs. ProShares Trust | IShares Bitcoin vs. iShares Ethereum Trust | IShares Bitcoin vs. ProShares Trust | IShares 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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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