Correlation Between VanEck Ethereum and ProShares Trust

Can any of the company-specific risk be diversified away by investing in both VanEck 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 VanEck 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 VanEck Ethereum ETF and ProShares Trust, you can compare the effects of market volatilities on VanEck 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 VanEck Ethereum with a short position of ProShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Ethereum and ProShares Trust.

Diversification Opportunities for VanEck Ethereum and ProShares Trust

-0.95

Correlation Coefficient

VanEck Ethereum  ProShares Trust

Pay attention - limited upside

The 3 months correlation between VanEck and ProShares is -0.95. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Ethereum ETF and ProShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Trust and VanEck 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 VanEck Ethereum ETF 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 VanEck Ethereum i.e., VanEck Ethereum and ProShares Trust go up and down completely randomly.

Pair Corralation between VanEck Ethereum and ProShares Trust

Given the investment horizon of 90 days VanEck Ethereum ETF is expected to under-perform the ProShares Trust. But the etf apears to be less risky and, when comparing its historical volatility, VanEck Ethereum ETF is 1.99 times less risky than ProShares Trust. The etf trades about -0.11 of its potential returns per unit of risk. The ProShares Trust is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  2,093  in ProShares Trust on November 28, 2024 and sell it today you would earn a total of  1,240  from holding ProShares Trust or generate 59.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

VanEck Ethereum ETF  vs.  ProShares Trust

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.

ProShares Trust

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares Trust are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical indicators, ProShares Trust exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VanEck Ethereum and ProShares Trust

The main advantage of trading using opposite VanEck Ethereum and ProShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck 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 VanEck Ethereum ETF 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.