Correlation Between Invesco Galaxy and ProShares Trust

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

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

Diversification Opportunities for Invesco Galaxy and ProShares Trust

1.0

Correlation Coefficient

Invesco Galaxy  ProShares Trust

No risk reduction

The 3 months correlation between Invesco and ProShares is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Galaxy Ethereum and ProShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Trust and Invesco Galaxy 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 Invesco Galaxy Ethereum 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 Invesco Galaxy i.e., Invesco Galaxy and ProShares Trust go up and down completely randomly.

Pair Corralation between Invesco Galaxy and ProShares Trust

Given the investment horizon of 90 days Invesco Galaxy Ethereum is expected to generate 1.0 times more return on investment than ProShares Trust. However, Invesco Galaxy Ethereum is 1.0 times less risky than ProShares Trust. It trades about 0.18 of its potential returns per unit of risk. ProShares Trust is currently generating about 0.18 per unit of risk. If you would invest  2,424  in Invesco Galaxy Ethereum on September 13, 2024 and sell it today you would earn a total of  1,409  from holding Invesco Galaxy Ethereum or generate 58.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.44%
Values	Daily Returns

Invesco Galaxy Ethereum  vs.  ProShares Trust

Invesco Galaxy Ethereum

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Galaxy Ethereum are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Invesco Galaxy demonstrated solid returns over the last few months and may actually be approaching a breakup point.

ProShares Trust

Risk-Adjusted Performance

14 of 100

Good

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

Pair Trading with Invesco Galaxy and ProShares Trust

The main advantage of trading using opposite Invesco Galaxy and ProShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Galaxy 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 Invesco Galaxy Ethereum 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.