Correlation Between ProShares VIX and Return Stacked

Can any of the company-specific risk be diversified away by investing in both ProShares VIX and Return Stacked 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 Return Stacked into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ProShares VIX Mid Term and Return Stacked Bonds, you can compare the effects of market volatilities on ProShares VIX and Return Stacked 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 Return Stacked. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares VIX and Return Stacked.

Diversification Opportunities for ProShares VIX and Return Stacked

-0.01

Correlation Coefficient

ProShares VIX  Return Stacked

Good diversification

The 3 months correlation between ProShares and Return is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding ProShares VIX Mid Term and Return Stacked Bonds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Return Stacked Bonds 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 Mid Term are associated (or correlated) with Return Stacked. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Return Stacked Bonds has no effect on the direction of ProShares VIX i.e., ProShares VIX and Return Stacked go up and down completely randomly.

Pair Corralation between ProShares VIX and Return Stacked

Given the investment horizon of 90 days ProShares VIX Mid Term is expected to generate 3.38 times more return on investment than Return Stacked. However, ProShares VIX is 3.38 times more volatile than Return Stacked Bonds. It trades about 0.07 of its potential returns per unit of risk. Return Stacked Bonds is currently generating about 0.14 per unit of risk. If you would invest  1,600  in ProShares VIX Mid Term on May 10, 2025 and sell it today you would earn a total of  75.00  from holding ProShares VIX Mid Term or generate 4.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

ProShares VIX Mid Term  vs.  Return Stacked Bonds

ProShares VIX Mid

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares VIX Mid Term are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, ProShares VIX is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Return Stacked Bonds

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Return Stacked Bonds are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, Return Stacked is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ProShares VIX and Return Stacked

The main advantage of trading using opposite ProShares VIX and Return Stacked positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares VIX position performs unexpectedly, Return Stacked 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 Return Stacked will offset losses from the drop in Return Stacked's long position.

The idea behind ProShares VIX Mid Term and Return Stacked Bonds 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.

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 Stocks Directory module to find actively traded stocks across global markets.