Correlation Between ProShares Bitcoin and WisdomTree 9060

Can any of the company-specific risk be diversified away by investing in both ProShares Bitcoin and WisdomTree 9060 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 Bitcoin and WisdomTree 9060 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ProShares Bitcoin Strategy and WisdomTree 9060 Balanced, you can compare the effects of market volatilities on ProShares Bitcoin and WisdomTree 9060 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 Bitcoin with a short position of WisdomTree 9060. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Bitcoin and WisdomTree 9060.

Diversification Opportunities for ProShares Bitcoin and WisdomTree 9060

0.85

Correlation Coefficient

ProShares Bitcoin  WisdomTree 9060

Very poor diversification

The 3 months correlation between ProShares and WisdomTree is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Bitcoin Strategy and WisdomTree 9060 Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree 9060 Balanced and ProShares Bitcoin 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 Bitcoin Strategy are associated (or correlated) with WisdomTree 9060. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree 9060 Balanced has no effect on the direction of ProShares Bitcoin i.e., ProShares Bitcoin and WisdomTree 9060 go up and down completely randomly.

Pair Corralation between ProShares Bitcoin and WisdomTree 9060

Given the investment horizon of 90 days ProShares Bitcoin Strategy is expected to generate 2.6 times more return on investment than WisdomTree 9060. However, ProShares Bitcoin is 2.6 times more volatile than WisdomTree 9060 Balanced. It trades about 0.15 of its potential returns per unit of risk. WisdomTree 9060 Balanced is currently generating about 0.26 per unit of risk. If you would invest  1,879  in ProShares Bitcoin Strategy on May 1, 2025 and sell it today you would earn a total of  363.00  from holding ProShares Bitcoin Strategy or generate 19.32% return on investment over 90 days.

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

ProShares Bitcoin Strategy  vs.  WisdomTree 9060 Balanced

ProShares Bitcoin

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares Bitcoin Strategy are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, ProShares Bitcoin displayed solid returns over the last few months and may actually be approaching a breakup point.

WisdomTree 9060 Balanced

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in WisdomTree 9060 Balanced are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, WisdomTree 9060 may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with ProShares Bitcoin and WisdomTree 9060

The main advantage of trading using opposite ProShares Bitcoin and WisdomTree 9060 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Bitcoin position performs unexpectedly, WisdomTree 9060 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 WisdomTree 9060 will offset losses from the drop in WisdomTree 9060's long position.

The idea behind ProShares Bitcoin Strategy and WisdomTree 9060 Balanced 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.