Correlation Between VanEck Ethereum and ProShares Bitcoin
Can any of the company-specific risk be diversified away by investing in both VanEck 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 VanEck 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 VanEck Ethereum ETF and ProShares Bitcoin Strategy, you can compare the effects of market volatilities on VanEck 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 VanEck Ethereum with a short position of ProShares Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Ethereum and ProShares Bitcoin.
Diversification Opportunities for VanEck Ethereum and ProShares Bitcoin
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between VanEck and ProShares is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Ethereum ETF and ProShares Bitcoin Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Bitcoin and VanEck 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 VanEck Ethereum ETF 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 VanEck Ethereum i.e., VanEck Ethereum and ProShares Bitcoin go up and down completely randomly.
Pair Corralation between VanEck Ethereum and ProShares Bitcoin
Given the investment horizon of 90 days VanEck Ethereum ETF is expected to under-perform the ProShares Bitcoin. In addition to that, VanEck Ethereum is 2.73 times more volatile than ProShares Bitcoin Strategy. It trades about -0.22 of its total potential returns per unit of risk. ProShares Bitcoin Strategy is currently generating about -0.21 per unit of volatility. If you would invest 2,452 in ProShares Bitcoin Strategy on November 18, 2024 and sell it today you would lose (190.00) from holding ProShares Bitcoin Strategy or give up 7.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Ethereum ETF vs. ProShares Bitcoin Strategy
Performance |
| Timeline |
| VanEck Ethereum ETF |
| ProShares Bitcoin |
VanEck Ethereum and ProShares Bitcoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Ethereum and ProShares Bitcoin
The main advantage of trading using opposite VanEck Ethereum and ProShares Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck 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.| VanEck Ethereum vs. Grayscale Funds Trust | VanEck Ethereum vs. ProShares Trust | VanEck Ethereum vs. iShares Ethereum Trust | VanEck Ethereum vs. ProShares Trust |
| ProShares Bitcoin vs. Grayscale Bitcoin Trust | ProShares Bitcoin vs. Grayscale Ethereum Trust | ProShares Bitcoin vs. Coinbase Global | ProShares Bitcoin vs. Valkyrie Bitcoin Strategy |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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