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
-0.95 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and Franklin is -0.95. 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 25.48 times more return on investment than Franklin Bitcoin. However, ProShares Trust is 25.48 times more volatile than Franklin Bitcoin ETF. It trades about 0.09 of its potential returns per unit of risk. Franklin Bitcoin ETF is currently generating about 0.11 per unit of risk. If you would invest 0.00 in ProShares Trust on August 26, 2024 and sell it today you would earn a total of 2,663 from holding ProShares Trust or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 54.3% |
| 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. ProShares Trust | ProShares Trust vs. iShares Ethereum Trust | ProShares Trust vs. Grayscale Ethereum Trust | ProShares Trust vs. ProShares Trust |
| 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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