Correlation Between ProShares UltraPro and Bitwise Funds
Can any of the company-specific risk be diversified away by investing in both ProShares UltraPro and Bitwise Funds 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 ProShares UltraPro and Bitwise Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares UltraPro SP500 and Bitwise Funds Trust, you can compare the effects of market volatilities on ProShares UltraPro and Bitwise Funds 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 ProShares UltraPro with a short position of Bitwise Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraPro and Bitwise Funds.
Diversification Opportunities for ProShares UltraPro and Bitwise Funds
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ProShares and Bitwise is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraPro SP500 and Bitwise Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitwise Funds Trust and ProShares UltraPro 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 ProShares UltraPro SP500 are associated (or correlated) with Bitwise Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitwise Funds Trust has no effect on the direction of ProShares UltraPro i.e., ProShares UltraPro and Bitwise Funds go up and down completely randomly.
Pair Corralation between ProShares UltraPro and Bitwise Funds
Given the investment horizon of 90 days ProShares UltraPro is expected to generate 1.55 times less return on investment than Bitwise Funds. But when comparing it to its historical volatility, ProShares UltraPro SP500 is 1.56 times less risky than Bitwise Funds. It trades about 0.11 of its potential returns per unit of risk. Bitwise Funds Trust is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,409 in Bitwise Funds Trust on September 2, 2024 and sell it today you would earn a total of 3,597 from holding Bitwise Funds Trust or generate 149.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 79.3% |
| Values | Daily Returns |
ProShares UltraPro SP500 vs. Bitwise Funds Trust
Performance |
| Timeline |
| ProShares UltraPro SP500 |
| Bitwise Funds Trust |
ProShares UltraPro and Bitwise Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares UltraPro and Bitwise Funds
The main advantage of trading using opposite ProShares UltraPro and Bitwise Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraPro position performs unexpectedly, Bitwise Funds 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 Bitwise Funds will offset losses from the drop in Bitwise Funds' long position.| ProShares UltraPro vs. ProShares UltraPro Dow30 | ProShares UltraPro vs. ProShares UltraPro Short | ProShares UltraPro vs. ProShares UltraPro QQQ | ProShares UltraPro vs. Direxion Daily Small |
| Bitwise Funds vs. ProShares Trust | Bitwise Funds vs. iShares Ethereum Trust | Bitwise Funds vs. ProShares Trust | Bitwise Funds vs. Grayscale Ethereum 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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