Correlation Between Grayscale Bitcoin and ProShares Bitcoin
Can any of the company-specific risk be diversified away by investing in both Grayscale Bitcoin 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 Bitcoin 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 Bitcoin Trust and ProShares Bitcoin Strategy, you can compare the effects of market volatilities on Grayscale Bitcoin 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 Bitcoin with a short position of ProShares Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Bitcoin and ProShares Bitcoin.
Diversification Opportunities for Grayscale Bitcoin and ProShares Bitcoin
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Grayscale and ProShares is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Bitcoin 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 Bitcoin 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 Bitcoin 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 Bitcoin i.e., Grayscale Bitcoin and ProShares Bitcoin go up and down completely randomly.
Pair Corralation between Grayscale Bitcoin and ProShares Bitcoin
Given the investment horizon of 90 days Grayscale Bitcoin Trust is expected to generate 0.99 times more return on investment than ProShares Bitcoin. However, Grayscale Bitcoin Trust is 1.01 times less risky than ProShares Bitcoin. It trades about 0.48 of its potential returns per unit of risk. ProShares Bitcoin Strategy is currently generating about 0.48 per unit of risk. If you would invest 5,309 in Grayscale Bitcoin Trust on August 26, 2024 and sell it today you would earn a total of 2,578 from holding Grayscale Bitcoin Trust or generate 48.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grayscale Bitcoin Trust vs. ProShares Bitcoin Strategy
Performance |
| Timeline |
| Grayscale Bitcoin Trust |
| ProShares Bitcoin |
Grayscale Bitcoin and ProShares Bitcoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Bitcoin and ProShares Bitcoin
The main advantage of trading using opposite Grayscale Bitcoin and ProShares Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Bitcoin 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 Bitcoin vs. Grayscale Ethereum Trust | Grayscale Bitcoin vs. Riot Blockchain | Grayscale Bitcoin vs. Marathon Digital Holdings | Grayscale Bitcoin vs. Coinbase Global |
| 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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