Correlation Between VIIX and ProShares Ultra

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

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

Diversification Opportunities for VIIX and ProShares Ultra

0.0

Correlation Coefficient

VIIX  ProShares Ultra

Pay attention - limited upside

The 3 months correlation between VIIX and ProShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding VIIX and ProShares Ultra VIX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Ultra VIX and VIIX 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 VIIX are associated (or correlated) with ProShares Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Ultra VIX has no effect on the direction of VIIX i.e., VIIX and ProShares Ultra go up and down completely randomly.

Pair Corralation between VIIX and ProShares Ultra

If you would invest  315.00  in VIIX on September 15, 2024 and sell it today you would earn a total of  0.00  from holding VIIX or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

VIIX  vs.  ProShares Ultra VIX

VIIX

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VIIX has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, VIIX is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

ProShares Ultra VIX

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ProShares Ultra VIX has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Etf's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

Pair Trading with VIIX and ProShares Ultra

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

The idea behind VIIX and ProShares Ultra VIX 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.

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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.