Correlation Between FT Cboe and ProShares VIX
Can any of the company-specific risk be diversified away by investing in both FT Cboe 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 FT Cboe and ProShares VIX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FT Cboe Vest and ProShares VIX Mid Term, you can compare the effects of market volatilities on FT Cboe 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 FT Cboe with a short position of ProShares VIX. Check out your portfolio center. Please also check ongoing floating volatility patterns of FT Cboe and ProShares VIX.
Diversification Opportunities for FT Cboe and ProShares VIX
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between DSEP and ProShares is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding FT Cboe Vest 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 FT Cboe 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 FT Cboe Vest 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 FT Cboe i.e., FT Cboe and ProShares VIX go up and down completely randomly.
Pair Corralation between FT Cboe and ProShares VIX
Given the investment horizon of 90 days FT Cboe Vest is expected to generate 0.19 times more return on investment than ProShares VIX. However, FT Cboe Vest is 5.2 times less risky than ProShares VIX. It trades about 0.15 of its potential returns per unit of risk. ProShares VIX Mid Term is currently generating about -0.06 per unit of risk. If you would invest 3,048 in FT Cboe Vest on September 12, 2024 and sell it today you would earn a total of 1,050 from holding FT Cboe Vest or generate 34.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FT Cboe Vest vs. ProShares VIX Mid Term
Performance |
| Timeline |
| FT Cboe Vest |
| ProShares VIX Mid |
FT Cboe and ProShares VIX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FT Cboe and ProShares VIX
The main advantage of trading using opposite FT Cboe and ProShares VIX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FT Cboe 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.| FT Cboe vs. Innovator ETFs Trust | FT Cboe vs. First Trust Cboe | FT Cboe vs. FT Cboe Vest | FT Cboe vs. Innovator SP 500 |
| ProShares VIX vs. ProShares Ultra Euro | ProShares VIX vs. ProShares UltraShort Yen | ProShares VIX vs. ProShares Ultra Telecommunications | ProShares VIX vs. ProShares Ultra Consumer |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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