Correlation Between ProShares Trust and Bitwise Funds
Can any of the company-specific risk be diversified away by investing in both ProShares Trust 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 Trust 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 Trust and Bitwise Funds Trust, you can compare the effects of market volatilities on ProShares Trust 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 Trust with a short position of Bitwise Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Trust and Bitwise Funds.
Diversification Opportunities for ProShares Trust and Bitwise Funds
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and Bitwise is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Trust 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 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 ProShares Trust 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 Trust i.e., ProShares Trust and Bitwise Funds go up and down completely randomly.
Pair Corralation between ProShares Trust and Bitwise Funds
Given the investment horizon of 90 days ProShares Trust is expected to generate 1.88 times more return on investment than Bitwise Funds. However, ProShares Trust is 1.88 times more volatile than Bitwise Funds Trust. It trades about 0.23 of its potential returns per unit of risk. Bitwise Funds Trust is currently generating about -0.49 per unit of risk. If you would invest 1,720 in ProShares Trust on October 13, 2024 and sell it today you would earn a total of 575.00 from holding ProShares Trust or generate 33.43% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
ProShares Trust vs. Bitwise Funds Trust
Performance |
Timeline |
ProShares Trust |
Bitwise Funds Trust |
ProShares Trust and Bitwise Funds Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ProShares Trust and Bitwise Funds
The main advantage of trading using opposite ProShares Trust and Bitwise Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Trust 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 Trust vs. ProShares Trust | ProShares Trust vs. iShares Ethereum Trust | ProShares Trust vs. Grayscale Ethereum Trust | ProShares Trust vs. ProShares Trust |
Bitwise Funds vs. ProShares Trust | Bitwise Funds vs. iShares Ethereum Trust | Bitwise Funds vs. ProShares Trust | Bitwise Funds vs. Grayscale Ethereum 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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