Correlation Between Tidal Trust and ProShares Bitcoin
Can any of the company-specific risk be diversified away by investing in both Tidal Trust 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 Tidal Trust and ProShares Bitcoin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tidal Trust II and ProShares Bitcoin Strategy, you can compare the effects of market volatilities on Tidal Trust 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 Tidal Trust with a short position of ProShares Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tidal Trust and ProShares Bitcoin.
Diversification Opportunities for Tidal Trust and ProShares Bitcoin
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tidal and ProShares is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust II and ProShares Bitcoin Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Bitcoin and Tidal Trust 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 Tidal Trust II 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 Tidal Trust i.e., Tidal Trust and ProShares Bitcoin go up and down completely randomly.
Pair Corralation between Tidal Trust and ProShares Bitcoin
Given the investment horizon of 90 days Tidal Trust II is expected to generate 0.85 times more return on investment than ProShares Bitcoin. However, Tidal Trust II is 1.18 times less risky than ProShares Bitcoin. It trades about -0.12 of its potential returns per unit of risk. ProShares Bitcoin Strategy is currently generating about -0.21 per unit of risk. If you would invest 1,266 in Tidal Trust II on November 18, 2024 and sell it today you would lose (52.00) from holding Tidal Trust II or give up 4.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tidal Trust II vs. ProShares Bitcoin Strategy
Performance |
| Timeline |
| Tidal Trust II |
| ProShares Bitcoin |
Tidal Trust and ProShares Bitcoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tidal Trust and ProShares Bitcoin
The main advantage of trading using opposite Tidal Trust and ProShares Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tidal Trust 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.| Tidal Trust vs. iShares Dividend and | Tidal Trust vs. Martin Currie Sustainable | Tidal Trust vs. VictoryShares THB Mid | Tidal Trust vs. Mast Global Battery |
| 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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