Correlation Between ProShares VIX and WisdomTree SmallCap
Can any of the company-specific risk be diversified away by investing in both ProShares VIX and WisdomTree SmallCap 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 WisdomTree SmallCap 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 WisdomTree SmallCap Quality, you can compare the effects of market volatilities on ProShares VIX and WisdomTree SmallCap 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 WisdomTree SmallCap. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares VIX and WisdomTree SmallCap.
Diversification Opportunities for ProShares VIX and WisdomTree SmallCap
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and WisdomTree is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding ProShares VIX Short Term and WisdomTree SmallCap Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree SmallCap 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 WisdomTree SmallCap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree SmallCap has no effect on the direction of ProShares VIX i.e., ProShares VIX and WisdomTree SmallCap go up and down completely randomly.
Pair Corralation between ProShares VIX and WisdomTree SmallCap
Given the investment horizon of 90 days ProShares VIX Short Term is expected to under-perform the WisdomTree SmallCap. In addition to that, ProShares VIX is 2.21 times more volatile than WisdomTree SmallCap Quality. It trades about -0.21 of its total potential returns per unit of risk. WisdomTree SmallCap Quality is currently generating about 0.15 per unit of volatility. If you would invest 4,540 in WisdomTree SmallCap Quality on June 5, 2025 and sell it today you would earn a total of 538.00 from holding WisdomTree SmallCap Quality or generate 11.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares VIX Short Term vs. WisdomTree SmallCap Quality
Performance |
| Timeline |
| ProShares VIX Short |
| WisdomTree SmallCap |
ProShares VIX and WisdomTree SmallCap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares VIX and WisdomTree SmallCap
The main advantage of trading using opposite ProShares VIX and WisdomTree SmallCap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares VIX position performs unexpectedly, WisdomTree SmallCap 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 WisdomTree SmallCap will offset losses from the drop in WisdomTree SmallCap's long position.| 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 |
| WisdomTree SmallCap vs. WisdomTree Emerging Markets | WisdomTree SmallCap vs. WisdomTree Interest Rate | WisdomTree SmallCap vs. WisdomTree Interest Rate | WisdomTree SmallCap vs. WisdomTree Quality Dividend |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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