Correlation Between ProShares VIX and TSJA

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

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

Diversification Opportunities for ProShares VIX and TSJA

0.0

Correlation Coefficient

ProShares VIX  TSJA

Pay attention - limited upside

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

Pair Corralation between ProShares VIX and TSJA

If you would invest  4,473  in ProShares VIX Short Term on December 29, 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	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

ProShares VIX Short Term  vs.  TSJA

ProShares VIX Short

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares VIX Short Term are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, ProShares VIX showed solid returns over the last few months and may actually be approaching a breakup point.

TSJA

Risk-Adjusted Performance

Very Weak

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

Pair Trading with ProShares VIX and TSJA

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

The idea behind ProShares VIX Short Term and TSJA 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.