Correlation Between Cardano and ProShares Trust

Can any of the company-specific risk be diversified away by investing in both Cardano 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 Cardano and ProShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cardano and ProShares Trust, you can compare the effects of market volatilities on Cardano 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 Cardano with a short position of ProShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardano and ProShares Trust.

Diversification Opportunities for Cardano and ProShares Trust

0.55

Correlation Coefficient

Cardano  ProShares Trust

Very weak diversification

The 3 months correlation between Cardano and ProShares is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Cardano and ProShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Trust and Cardano 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 Cardano 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 Cardano i.e., Cardano and ProShares Trust go up and down completely randomly.

Pair Corralation between Cardano and ProShares Trust

Assuming the 90 days trading horizon Cardano is expected to generate 1.29 times more return on investment than ProShares Trust. However, Cardano is 1.29 times more volatile than ProShares Trust. It trades about -0.02 of its potential returns per unit of risk. ProShares Trust is currently generating about -0.05 per unit of risk. If you would invest  94.00  in Cardano on December 22, 2024 and sell it today you would lose (23.00) from holding Cardano or give up 24.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.31%
Values	Daily Returns

Cardano  vs.  ProShares Trust

Cardano

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cardano has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Crypto's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for Cardano shareholders.

ProShares Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days ProShares Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Etf's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.

Pair Trading with Cardano and ProShares Trust

The main advantage of trading using opposite Cardano and ProShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardano 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.

The idea behind Cardano and ProShares Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.