Correlation Between EA Series and ProShares VIX
Can any of the company-specific risk be diversified away by investing in both EA 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 EA 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 EA Series Trust and ProShares VIX Mid Term, you can compare the effects of market volatilities on EA 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 EA Series with a short position of ProShares VIX. Check out your portfolio center. Please also check ongoing floating volatility patterns of EA Series and ProShares VIX.
Diversification Opportunities for EA Series and ProShares VIX
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between DRAI and ProShares is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding EA Series Trust 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 EA 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 EA Series Trust 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 EA Series i.e., EA Series and ProShares VIX go up and down completely randomly.
Pair Corralation between EA Series and ProShares VIX
Given the investment horizon of 90 days EA Series Trust is expected to under-perform the ProShares VIX. But the etf apears to be less risky and, when comparing its historical volatility, EA Series Trust is 2.06 times less risky than ProShares VIX. The etf trades about -0.05 of its potential returns per unit of risk. The ProShares VIX Mid Term is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 1,721 in ProShares VIX Mid Term on August 26, 2024 and sell it today you would lose (318.00) from holding ProShares VIX Mid Term or give up 18.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 39.36% |
| Values | Daily Returns |
EA Series Trust vs. ProShares VIX Mid Term
Performance |
| Timeline |
| EA Series Trust |
| ProShares VIX Mid |
EA Series and ProShares VIX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EA Series and ProShares VIX
The main advantage of trading using opposite EA Series and ProShares VIX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EA 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.| EA Series vs. Tidal Trust II | EA Series vs. ProShares VIX Mid Term | EA Series vs. ProShares VIX Short Term | EA Series vs. LHA Market State |
| 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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