Correlation Between ProShares Ultra and ProShares VIX
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra 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 ProShares Ultra and ProShares VIX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Ultra 20 and ProShares VIX Mid Term, you can compare the effects of market volatilities on ProShares Ultra 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 ProShares Ultra with a short position of ProShares VIX. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and ProShares VIX.
Diversification Opportunities for ProShares Ultra and ProShares VIX
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ProShares and ProShares is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra 20 and ProShares VIX Mid Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares VIX Mid and ProShares Ultra 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 Ultra 20 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 Mid has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and ProShares VIX go up and down completely randomly.
Pair Corralation between ProShares Ultra and ProShares VIX
Considering the 90-day investment horizon ProShares Ultra 20 is expected to generate 1.19 times more return on investment than ProShares VIX. However, ProShares Ultra is 1.19 times more volatile than ProShares VIX Mid Term. It trades about 0.19 of its potential returns per unit of risk. ProShares VIX Mid Term is currently generating about 0.07 per unit of risk. If you would invest 1,550 in ProShares Ultra 20 on March 22, 2025 and sell it today you would earn a total of 102.00 from holding ProShares Ultra 20 or generate 6.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
ProShares Ultra 20 vs. ProShares VIX Mid Term
Performance |
| Timeline |
| ProShares Ultra 20 |
| ProShares VIX Mid |
ProShares Ultra and ProShares VIX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and ProShares VIX
The main advantage of trading using opposite ProShares Ultra and ProShares VIX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra 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.| ProShares Ultra vs. ProShares Ultra MSCI | ProShares Ultra vs. Direxion Daily 7 10 | ProShares Ultra vs. ProShares Ultra Euro | ProShares Ultra vs. ProShares Ultra High |
| ProShares VIX vs. iPath Series B | ProShares VIX vs. ProShares VIX Short Term | ProShares VIX vs. ProShares Short VIX | ProShares VIX vs. ProShares Ultra 20 |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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