Correlation Between IShares Ethereum and ProShares Trust

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

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

Diversification Opportunities for IShares Ethereum and ProShares Trust

-0.97

Correlation Coefficient

IShares Ethereum  ProShares Trust

Pay attention - limited upside

The 3 months correlation between IShares and ProShares is -0.97. Overlapping area represents the amount of risk that can be diversified away by holding iShares Ethereum Trust and ProShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Trust and IShares Ethereum 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 iShares Ethereum Trust 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 IShares Ethereum i.e., IShares Ethereum and ProShares Trust go up and down completely randomly.

Pair Corralation between IShares Ethereum and ProShares Trust

Given the investment horizon of 90 days iShares Ethereum Trust is expected to generate 0.51 times more return on investment than ProShares Trust. However, iShares Ethereum Trust is 1.95 times less risky than ProShares Trust. It trades about 0.16 of its potential returns per unit of risk. ProShares Trust is currently generating about -0.16 per unit of risk. If you would invest  1,901  in iShares Ethereum Trust on August 30, 2024 and sell it today you would earn a total of  859.00  from holding iShares Ethereum Trust or generate 45.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

iShares Ethereum Trust  vs.  ProShares Trust

iShares Ethereum Trust

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Ethereum Trust are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent technical indicators, IShares Ethereum sustained solid returns over the last few months and may actually be approaching a breakup point.

ProShares Trust

Risk-Adjusted Performance

0 of 100

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 inconsistent performance in the last few months, the Etf's technical indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the fund shareholders.

Pair Trading with IShares Ethereum and ProShares Trust

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

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.