Correlation Between Grayscale Ethereum and ProShares Bitcoin
Can any of the company-specific risk be diversified away by investing in both Grayscale Ethereum and ProShares 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 Grayscale Ethereum and ProShares Bitcoin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grayscale Ethereum Trust and ProShares Bitcoin Strategy, you can compare the effects of market volatilities on Grayscale Ethereum and ProShares 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 Grayscale Ethereum with a short position of ProShares Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Ethereum and ProShares Bitcoin.
Diversification Opportunities for Grayscale Ethereum and ProShares Bitcoin
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Grayscale and ProShares is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Ethereum Trust and ProShares Bitcoin Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Bitcoin and Grayscale Ethereum 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 Grayscale Ethereum Trust are associated (or correlated) with ProShares Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Bitcoin has no effect on the direction of Grayscale Ethereum i.e., Grayscale Ethereum and ProShares Bitcoin go up and down completely randomly.
Pair Corralation between Grayscale Ethereum and ProShares Bitcoin
Given the investment horizon of 90 days Grayscale Ethereum is expected to generate 1.33 times less return on investment than ProShares Bitcoin. In addition to that, Grayscale Ethereum is 1.35 times more volatile than ProShares Bitcoin Strategy. It trades about 0.06 of its total potential returns per unit of risk. ProShares Bitcoin Strategy is currently generating about 0.11 per unit of volatility. If you would invest 1,124 in ProShares Bitcoin Strategy on August 27, 2024 and sell it today you would earn a total of 1,545 from holding ProShares Bitcoin Strategy or generate 137.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grayscale Ethereum Trust vs. ProShares Bitcoin Strategy
Performance |
| Timeline |
| Grayscale Ethereum Trust |
| ProShares Bitcoin |
Grayscale Ethereum and ProShares Bitcoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Ethereum and ProShares Bitcoin
The main advantage of trading using opposite Grayscale Ethereum and ProShares Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Ethereum position performs unexpectedly, ProShares 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 ProShares Bitcoin will offset losses from the drop in ProShares Bitcoin's long position.| Grayscale Ethereum vs. Grayscale Bitcoin Trust | Grayscale Ethereum vs. Grayscale Litecoin Trust | Grayscale Ethereum vs. Grayscale Digital Large | Grayscale Ethereum vs. Bitwise 10 Crypto |
| ProShares Bitcoin vs. Grayscale Bitcoin Trust | ProShares Bitcoin vs. Siren Nasdaq NexGen | ProShares Bitcoin vs. Grayscale Bitcoin Mini | ProShares Bitcoin vs. First Trust SkyBridge |
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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