Correlation Between IPath Series and ProShares VIX
Can any of the company-specific risk be diversified away by investing in both IPath Series 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 IPath Series and ProShares VIX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iPath Series B and ProShares VIX Mid Term, you can compare the effects of market volatilities on IPath Series 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 IPath Series with a short position of ProShares VIX. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPath Series and ProShares VIX.
Diversification Opportunities for IPath Series and ProShares VIX
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IPath and ProShares is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding iPath Series B 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 IPath Series 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 iPath Series B 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 IPath Series i.e., IPath Series and ProShares VIX go up and down completely randomly.
Pair Corralation between IPath Series and ProShares VIX
Considering the 90-day investment horizon iPath Series B is expected to generate 2.21 times more return on investment than ProShares VIX. However, IPath Series is 2.21 times more volatile than ProShares VIX Mid Term. It trades about 0.06 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 4,810 in iPath Series B on March 21, 2025 and sell it today you would earn a total of 480.00 from holding iPath Series B or generate 9.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iPath Series B vs. ProShares VIX Mid Term
Performance |
| Timeline |
| iPath Series B |
| ProShares VIX Mid |
IPath Series and ProShares VIX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPath Series and ProShares VIX
The main advantage of trading using opposite IPath Series and ProShares VIX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPath Series 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.| IPath Series vs. ProShares Ultra VIX | IPath Series vs. ProShares Short VIX | IPath Series vs. ProShares UltraPro Short | IPath Series vs. iShares 20 Year |
| 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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