Correlation Between Volatility Shares and ProShares VIX
Can any of the company-specific risk be diversified away by investing in both Volatility Shares and ProShares VIX 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 Volatility Shares and ProShares VIX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Volatility Shares Trust and ProShares VIX Short Term, you can compare the effects of market volatilities on Volatility Shares and ProShares VIX 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 Volatility Shares with a short position of ProShares VIX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volatility Shares and ProShares VIX.
Diversification Opportunities for Volatility Shares and ProShares VIX
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Volatility and ProShares is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Volatility Shares Trust and ProShares VIX Short Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares VIX Short and Volatility Shares 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 Volatility Shares Trust are associated (or correlated) with ProShares VIX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares VIX Short has no effect on the direction of Volatility Shares i.e., Volatility Shares and ProShares VIX go up and down completely randomly.
Pair Corralation between Volatility Shares and ProShares VIX
Given the investment horizon of 90 days Volatility Shares Trust is expected to under-perform the ProShares VIX. In addition to that, Volatility Shares is 1.44 times more volatile than ProShares VIX Short Term. It trades about -0.07 of its total potential returns per unit of risk. ProShares VIX Short Term is currently generating about 0.07 per unit of volatility. If you would invest 4,473 in ProShares VIX Short Term on December 30, 2024 and sell it today you would earn a total of 575.00 from holding ProShares VIX Short Term or generate 12.85% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Volatility Shares Trust vs. ProShares VIX Short Term
Performance |
Timeline |
Volatility Shares Trust |
ProShares VIX Short |
Volatility Shares and ProShares VIX Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Volatility Shares and ProShares VIX
The main advantage of trading using opposite Volatility Shares and ProShares VIX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volatility Shares position performs unexpectedly, ProShares VIX 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 VIX will offset losses from the drop in ProShares VIX's long position.Volatility Shares vs. Grayscale Funds Trust | Volatility Shares vs. ProShares Trust | Volatility Shares vs. Hashdex Nasdaq Crypto | Volatility Shares vs. iShares Ethereum Trust |
ProShares VIX vs. ProShares VIX Mid Term | ProShares VIX vs. ProShares Short VIX | ProShares VIX vs. ProShares Ultra VIX | ProShares VIX vs. iPath Series B |
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.
Other Complementary Tools
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Transaction History View history of all your transactions and understand their impact on performance | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |