Correlation Between ProShares Bitcoin and Bitwise Funds
Can any of the company-specific risk be diversified away by investing in both ProShares Bitcoin 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 Bitcoin 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 Bitcoin Strategy and Bitwise Funds Trust, you can compare the effects of market volatilities on ProShares Bitcoin 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 Bitcoin with a short position of Bitwise Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Bitcoin and Bitwise Funds.
Diversification Opportunities for ProShares Bitcoin and Bitwise Funds
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ProShares and Bitwise is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Bitcoin Strategy 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 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 ProShares Bitcoin Strategy 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 Bitcoin i.e., ProShares Bitcoin and Bitwise Funds go up and down completely randomly.
Pair Corralation between ProShares Bitcoin and Bitwise Funds
Given the investment horizon of 90 days ProShares Bitcoin Strategy is expected to under-perform the Bitwise Funds. In addition to that, ProShares Bitcoin is 1.34 times more volatile than Bitwise Funds Trust. It trades about -0.07 of its total potential returns per unit of risk. Bitwise Funds Trust is currently generating about -0.07 per unit of volatility. If you would invest 4,924 in Bitwise Funds Trust on December 1, 2024 and sell it today you would lose (474.00) from holding Bitwise Funds Trust or give up 9.63% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
ProShares Bitcoin Strategy vs. Bitwise Funds Trust
Performance |
Timeline |
ProShares Bitcoin |
Bitwise Funds Trust |
ProShares Bitcoin and Bitwise Funds Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ProShares Bitcoin and Bitwise Funds
The main advantage of trading using opposite ProShares Bitcoin and Bitwise Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Bitcoin 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 Bitcoin vs. Grayscale Bitcoin Trust | ProShares Bitcoin vs. Grayscale Ethereum Trust | ProShares Bitcoin vs. Coinbase Global | ProShares Bitcoin vs. Valkyrie Bitcoin Strategy |
Bitwise Funds vs. Tidal Commodities Trust | Bitwise Funds vs. Bitwise Crypto Industry | Bitwise Funds vs. USCF Sustainable Battery | Bitwise Funds vs. Osprey Bitcoin 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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