Correlation Between ProShares VIX and ProShares VIX

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

Diversification Opportunities for ProShares VIX and ProShares VIX

0.73

Correlation Coefficient

ProShares VIX  ProShares VIX

Poor diversification

The 3 months correlation between ProShares and ProShares is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding ProShares VIX Short Term 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 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 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 ProShares VIX i.e., ProShares VIX and ProShares VIX go up and down completely randomly.

Pair Corralation between ProShares VIX and ProShares VIX

Given the investment horizon of 90 days ProShares VIX Short Term is expected to under-perform the ProShares VIX. In addition to that, ProShares VIX is 2.22 times more volatile than ProShares VIX Mid Term. It trades about -0.18 of its total potential returns per unit of risk. ProShares VIX Mid Term is currently generating about -0.07 per unit of volatility. If you would invest  1,783  in ProShares VIX Mid Term on May 1, 2025 and sell it today you would lose (122.00) from holding ProShares VIX Mid Term or give up 6.84% of portfolio value over 90 days.

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

ProShares VIX Short Term  vs.  ProShares VIX Mid Term

ProShares VIX Short

Risk-Adjusted Performance

Very Weak

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 unfluctuating performance in the last few months, the Etf's basic indicators remain fairly strong which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

ProShares VIX Mid

Risk-Adjusted Performance

Very Weak

Over the last 90 days ProShares VIX Mid Term has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Etf's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Pair Trading with ProShares VIX and ProShares VIX

The main advantage of trading using opposite ProShares VIX and ProShares VIX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares VIX 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 VIX Short Term and ProShares VIX Mid 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 Commodity Directory module to find actively traded commodities issued by global exchanges.