Correlation Between ProShares Trust and VanEck Ethereum

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

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

Diversification Opportunities for ProShares Trust and VanEck Ethereum

0.99

Correlation Coefficient

ProShares Trust  VanEck Ethereum

No risk reduction

The 3 months correlation between ProShares and VanEck is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Trust and VanEck Ethereum ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Ethereum ETF 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 VanEck Ethereum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Ethereum ETF has no effect on the direction of ProShares Trust i.e., ProShares Trust and VanEck Ethereum go up and down completely randomly.

Pair Corralation between ProShares Trust and VanEck Ethereum

Given the investment horizon of 90 days ProShares Trust is expected to under-perform the VanEck Ethereum. In addition to that, ProShares Trust is 1.99 times more volatile than VanEck Ethereum ETF. It trades about -0.22 of its total potential returns per unit of risk. VanEck Ethereum ETF is currently generating about -0.2 per unit of volatility. If you would invest  4,604  in VanEck Ethereum ETF on November 28, 2024 and sell it today you would lose (960.00) from holding VanEck Ethereum ETF or give up 20.85% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

ProShares Trust  vs.  VanEck Ethereum ETF

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 technical indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.

VanEck Ethereum ETF

Risk-Adjusted Performance

Very Weak

Over the last 90 days VanEck Ethereum ETF 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 technical indicators remain fairly stable which may send shares a bit higher in March 2025. The latest fuss may also be a sign of long-term up-swing for the fund sophisticated investors.

Pair Trading with ProShares Trust and VanEck Ethereum

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

The idea behind ProShares Trust and VanEck Ethereum ETF 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.