Correlation Between Cboe Validus and ProShares VIX
Can any of the company-specific risk be diversified away by investing in both Cboe Validus 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 Cboe Validus and ProShares VIX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cboe Validus SP and ProShares VIX Short Term, you can compare the effects of market volatilities on Cboe Validus 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 Cboe Validus with a short position of ProShares VIX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cboe Validus and ProShares VIX.
Diversification Opportunities for Cboe Validus and ProShares VIX
-0.98 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cboe and ProShares is -0.98. Overlapping area represents the amount of risk that can be diversified away by holding Cboe Validus SP 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 Cboe Validus 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 Cboe Validus SP 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 Cboe Validus i.e., Cboe Validus and ProShares VIX go up and down completely randomly.
Pair Corralation between Cboe Validus and ProShares VIX
Given the investment horizon of 90 days Cboe Validus SP is expected to generate 0.13 times more return on investment than ProShares VIX. However, Cboe Validus SP is 7.93 times less risky than ProShares VIX. It trades about 0.45 of its potential returns per unit of risk. ProShares VIX Short Term is currently generating about -0.19 per unit of risk. If you would invest 1,836 in Cboe Validus SP on April 22, 2025 and sell it today you would earn a total of 233.00 from holding Cboe Validus SP or generate 12.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Cboe Validus SP vs. ProShares VIX Short Term
Performance |
| Timeline |
| Cboe Validus SP |
| ProShares VIX Short |
Cboe Validus and ProShares VIX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cboe Validus and ProShares VIX
The main advantage of trading using opposite Cboe Validus and ProShares VIX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cboe Validus 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.| Cboe Validus vs. Vanguard Total Stock | Cboe Validus vs. SPDR SP 500 | Cboe Validus vs. iShares Core SP | Cboe Validus vs. Vanguard Dividend Appreciation |
| 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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