Correlation Between ProShares VIX and EA Series
Can any of the company-specific risk be diversified away by investing in both ProShares VIX and EA Series 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 EA Series 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 EA Series Trust, you can compare the effects of market volatilities on ProShares VIX and EA Series 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 EA Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares VIX and EA Series.
Diversification Opportunities for ProShares VIX and EA Series
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and DRAI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ProShares VIX Mid Term and EA Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EA Series 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 EA Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EA Series Trust has no effect on the direction of ProShares VIX i.e., ProShares VIX and EA Series go up and down completely randomly.
Pair Corralation between ProShares VIX and EA Series
Given the investment horizon of 90 days ProShares VIX Mid Term is expected to under-perform the EA Series. In addition to that, ProShares VIX is 2.16 times more volatile than EA Series Trust. It trades about -0.19 of its total potential returns per unit of risk. EA Series Trust is currently generating about -0.08 per unit of volatility. If you would invest 2,436 in EA Series Trust on August 30, 2024 and sell it today you would lose (35.00) from holding EA Series Trust or give up 1.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
ProShares VIX Mid Term vs. EA Series Trust
Performance |
| Timeline |
| ProShares VIX Mid |
| EA Series Trust |
ProShares VIX and EA Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares VIX and EA Series
The main advantage of trading using opposite ProShares VIX and EA Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares VIX position performs unexpectedly, EA Series 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 EA Series will offset losses from the drop in EA Series' 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 |
| EA Series vs. Vanguard Total Stock | EA Series vs. SPDR SP 500 | EA Series vs. iShares Core SP | EA Series vs. Vanguard Total Bond |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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