Correlation Between ProShares VIX and PIMCO ETF
Can any of the company-specific risk be diversified away by investing in both ProShares VIX and PIMCO ETF 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 PIMCO ETF 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 PIMCO ETF Trust, you can compare the effects of market volatilities on ProShares VIX and PIMCO ETF 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 PIMCO ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares VIX and PIMCO ETF.
Diversification Opportunities for ProShares VIX and PIMCO ETF
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and PIMCO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ProShares VIX Mid Term and PIMCO ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO ETF Trust 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 PIMCO ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO ETF Trust has no effect on the direction of ProShares VIX i.e., ProShares VIX and PIMCO ETF go up and down completely randomly.
Pair Corralation between ProShares VIX and PIMCO ETF
Given the investment horizon of 90 days ProShares VIX Mid Term is expected to under-perform the PIMCO ETF. But the etf apears to be less risky and, when comparing its historical volatility, ProShares VIX Mid Term is 2.19 times less risky than PIMCO ETF. The etf trades about -0.02 of its potential returns per unit of risk. The PIMCO ETF Trust is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,549 in PIMCO ETF Trust on October 24, 2024 and sell it today you would earn a total of 80.00 from holding PIMCO ETF Trust or generate 3.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 96.72% |
| Values | Daily Returns |
ProShares VIX Mid Term vs. PIMCO ETF Trust
Performance |
| Timeline |
| ProShares VIX Mid |
| PIMCO ETF Trust |
ProShares VIX and PIMCO ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares VIX and PIMCO ETF
The main advantage of trading using opposite ProShares VIX and PIMCO ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares VIX position performs unexpectedly, PIMCO ETF 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 PIMCO ETF will offset losses from the drop in PIMCO ETF's long position.| 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 |
| PIMCO ETF vs. Tidal Trust II | PIMCO ETF vs. Draco Evolution AI | PIMCO ETF vs. ProShares VIX Mid Term | PIMCO ETF vs. ProShares VIX Short Term |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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