Correlation Between IShares Bitcoin and ProShares Trust
Can any of the company-specific risk be diversified away by investing in both IShares Bitcoin and ProShares Trust 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 IShares Bitcoin and ProShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Bitcoin Trust and ProShares Trust, you can compare the effects of market volatilities on IShares Bitcoin and ProShares Trust 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 IShares Bitcoin with a short position of ProShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Bitcoin and ProShares Trust.
Diversification Opportunities for IShares Bitcoin and ProShares Trust
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and ProShares is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding iShares Bitcoin Trust and ProShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Trust and IShares 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 iShares Bitcoin Trust are associated (or correlated) with ProShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Trust has no effect on the direction of IShares Bitcoin i.e., IShares Bitcoin and ProShares Trust go up and down completely randomly.
Pair Corralation between IShares Bitcoin and ProShares Trust
Given the investment horizon of 90 days IShares Bitcoin is expected to generate 1.15 times less return on investment than ProShares Trust. But when comparing it to its historical volatility, iShares Bitcoin Trust is 1.3 times less risky than ProShares Trust. It trades about 0.32 of its potential returns per unit of risk. ProShares Trust is currently generating about 0.28 of returns per unit of risk over similar time horizon. 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 |
iShares Bitcoin Trust vs. ProShares Trust
Performance |
| Timeline |
| iShares Bitcoin Trust |
| ProShares Trust |
IShares Bitcoin and ProShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Bitcoin and ProShares Trust
The main advantage of trading using opposite IShares Bitcoin and ProShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Bitcoin position performs unexpectedly, ProShares Trust 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 Trust will offset losses from the drop in ProShares Trust's long position.| IShares Bitcoin vs. ProShares Trust | IShares Bitcoin vs. iShares Ethereum Trust | IShares Bitcoin vs. ProShares Trust | IShares Bitcoin vs. Grayscale Ethereum Trust |
| ProShares Trust vs. iShares Ethereum Trust | ProShares Trust vs. ProShares Trust | ProShares Trust vs. Grayscale Ethereum Trust | ProShares Trust vs. ProShares 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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