Correlation Between ProShares MSCI and ProShares VIX

Can any of the company-specific risk be diversified away by investing in both ProShares MSCI 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 MSCI 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 MSCI Transformational and ProShares VIX Short Term, you can compare the effects of market volatilities on ProShares MSCI 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 MSCI with a short position of ProShares VIX. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares MSCI and ProShares VIX.

Diversification Opportunities for ProShares MSCI and ProShares VIX

-0.19

Correlation Coefficient

ProShares MSCI  ProShares VIX

Good diversification

The 3 months correlation between ProShares and ProShares is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding ProShares MSCI Transformationa 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 ProShares MSCI 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 MSCI Transformational 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 ProShares MSCI i.e., ProShares MSCI and ProShares VIX go up and down completely randomly.

Pair Corralation between ProShares MSCI and ProShares VIX

Given the investment horizon of 90 days ProShares MSCI Transformational is expected to generate 0.27 times more return on investment than ProShares VIX. However, ProShares MSCI Transformational is 3.65 times less risky than ProShares VIX. It trades about -0.03 of its potential returns per unit of risk. ProShares VIX Short Term is currently generating about -0.02 per unit of risk. If you would invest  5,185  in ProShares MSCI Transformational on September 11, 2025 and sell it today you would lose (119.00) from holding ProShares MSCI Transformational or give up 2.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

ProShares MSCI Transformationa  vs.  ProShares VIX Short Term

ProShares MSCI Trans

Risk-Adjusted Performance

Weakest

Over the last 90 days ProShares MSCI Transformational has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, ProShares MSCI is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

ProShares VIX Short

Risk-Adjusted Performance

Weakest

Over the last 90 days ProShares VIX Short Term has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, ProShares VIX is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ProShares MSCI and ProShares VIX

The main advantage of trading using opposite ProShares MSCI and ProShares VIX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares MSCI 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.

The idea behind ProShares MSCI Transformational and ProShares VIX Short Term pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.