Correlation Between ProShares VIX and Vanguard Russell
Can any of the company-specific risk be diversified away by investing in both ProShares VIX and Vanguard Russell 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 Vanguard Russell 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 Vanguard Russell 2000, you can compare the effects of market volatilities on ProShares VIX and Vanguard Russell 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 Vanguard Russell. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares VIX and Vanguard Russell.
Diversification Opportunities for ProShares VIX and Vanguard Russell
-0.92 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and Vanguard is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding ProShares VIX Short Term and Vanguard Russell 2000 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Russell 2000 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 Vanguard Russell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Russell 2000 has no effect on the direction of ProShares VIX i.e., ProShares VIX and Vanguard Russell go up and down completely randomly.
Pair Corralation between ProShares VIX and Vanguard Russell
Given the investment horizon of 90 days ProShares VIX Short Term is expected to under-perform the Vanguard Russell. In addition to that, ProShares VIX is 2.52 times more volatile than Vanguard Russell 2000. It trades about -0.21 of its total potential returns per unit of risk. Vanguard Russell 2000 is currently generating about 0.19 per unit of volatility. If you would invest 19,687 in Vanguard Russell 2000 on May 30, 2025 and sell it today you would earn a total of 2,867 from holding Vanguard Russell 2000 or generate 14.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.41% |
| Values | Daily Returns |
ProShares VIX Short Term vs. Vanguard Russell 2000
Performance |
| Timeline |
| ProShares VIX Short |
| Vanguard Russell 2000 |
ProShares VIX and Vanguard Russell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares VIX and Vanguard Russell
The main advantage of trading using opposite ProShares VIX and Vanguard Russell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares VIX position performs unexpectedly, Vanguard Russell 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 Vanguard Russell will offset losses from the drop in Vanguard Russell'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 |
| Vanguard Russell vs. Vanguard Russell 2000 | Vanguard Russell vs. Vanguard Russell 3000 | Vanguard Russell vs. Vanguard Russell 1000 |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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