Correlation Between ProShares Bitcoin and Brinks

Can any of the company-specific risk be diversified away by investing in both ProShares Bitcoin and Brinks 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 Brinks 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 Brinks Co 4625, you can compare the effects of market volatilities on ProShares Bitcoin and Brinks 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 Brinks. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Bitcoin and Brinks.

Diversification Opportunities for ProShares Bitcoin and Brinks

-0.33

Correlation Coefficient

ProShares Bitcoin  Brinks

Very good diversification

The 3 months correlation between ProShares and Brinks is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Bitcoin Strategy and Brinks Co 4625 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brinks Co 4625 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 Brinks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brinks Co 4625 has no effect on the direction of ProShares Bitcoin i.e., ProShares Bitcoin and Brinks go up and down completely randomly.

Pair Corralation between ProShares Bitcoin and Brinks

Given the investment horizon of 90 days ProShares Bitcoin Strategy is expected to generate 3.47 times more return on investment than Brinks. However, ProShares Bitcoin is 3.47 times more volatile than Brinks Co 4625. It trades about 0.19 of its potential returns per unit of risk. Brinks Co 4625 is currently generating about -0.09 per unit of risk. If you would invest  1,727  in ProShares Bitcoin Strategy on October 26, 2024 and sell it today you would earn a total of  776.00  from holding ProShares Bitcoin Strategy or generate 44.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

ProShares Bitcoin Strategy  vs.  Brinks Co 4625

ProShares Bitcoin

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares Bitcoin Strategy are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, ProShares Bitcoin displayed solid returns over the last few months and may actually be approaching a breakup point.

Brinks Co 4625

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brinks Co 4625 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Brinks is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ProShares Bitcoin and Brinks

The main advantage of trading using opposite ProShares Bitcoin and Brinks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Bitcoin position performs unexpectedly, Brinks 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 Brinks will offset losses from the drop in Brinks' long position.

The idea behind ProShares Bitcoin Strategy and Brinks Co 4625 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.

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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.