Correlation Between Simplify Bitcoin and ProShares Trust
Can any of the company-specific risk be diversified away by investing in both Simplify 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 Simplify 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 Simplify Bitcoin Strategy and ProShares Trust, you can compare the effects of market volatilities on Simplify 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 Simplify Bitcoin with a short position of ProShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simplify Bitcoin and ProShares Trust.
Diversification Opportunities for Simplify Bitcoin and ProShares Trust
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Simplify and ProShares is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Simplify Bitcoin Strategy and ProShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Trust and Simplify 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 Simplify Bitcoin Strategy 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 Simplify Bitcoin i.e., Simplify Bitcoin and ProShares Trust go up and down completely randomly.
Pair Corralation between Simplify Bitcoin and ProShares Trust
Given the investment horizon of 90 days Simplify Bitcoin Strategy is expected to generate 1.09 times more return on investment than ProShares Trust. However, Simplify Bitcoin is 1.09 times more volatile than ProShares Trust. It trades about 0.06 of its potential returns per unit of risk. ProShares Trust is currently generating about 0.05 per unit of risk. If you would invest 2,965 in Simplify Bitcoin Strategy on October 23, 2024 and sell it today you would earn a total of 192.00 from holding Simplify Bitcoin Strategy or generate 6.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simplify Bitcoin Strategy vs. ProShares Trust
Performance |
| Timeline |
| Simplify Bitcoin Strategy |
| ProShares Trust |
Simplify Bitcoin and ProShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simplify Bitcoin and ProShares Trust
The main advantage of trading using opposite Simplify Bitcoin and ProShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simplify 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.| Simplify Bitcoin vs. ProShares Trust | Simplify Bitcoin vs. iShares Ethereum Trust | Simplify Bitcoin vs. ProShares Trust | Simplify 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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