Correlation Between ProShares VIX and Defiance Nasdaq
Can any of the company-specific risk be diversified away by investing in both ProShares VIX and Defiance Nasdaq 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 Defiance Nasdaq 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 Defiance Nasdaq 100, you can compare the effects of market volatilities on ProShares VIX and Defiance Nasdaq 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 Defiance Nasdaq. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares VIX and Defiance Nasdaq.
Diversification Opportunities for ProShares VIX and Defiance Nasdaq
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ProShares and Defiance is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding ProShares VIX Mid Term and Defiance Nasdaq 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Defiance Nasdaq 100 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 Defiance Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Defiance Nasdaq 100 has no effect on the direction of ProShares VIX i.e., ProShares VIX and Defiance Nasdaq go up and down completely randomly.
Pair Corralation between ProShares VIX and Defiance Nasdaq
Given the investment horizon of 90 days ProShares VIX Mid Term is expected to under-perform the Defiance Nasdaq. In addition to that, ProShares VIX is 1.82 times more volatile than Defiance Nasdaq 100. It trades about -0.19 of its total potential returns per unit of risk. Defiance Nasdaq 100 is currently generating about 0.0 per unit of volatility. If you would invest 3,312 in Defiance Nasdaq 100 on August 30, 2024 and sell it today you would lose (4.00) from holding Defiance Nasdaq 100 or give up 0.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares VIX Mid Term vs. Defiance Nasdaq 100
Performance |
| Timeline |
| ProShares VIX Mid |
| Defiance Nasdaq 100 |
ProShares VIX and Defiance Nasdaq Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares VIX and Defiance Nasdaq
The main advantage of trading using opposite ProShares VIX and Defiance Nasdaq positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares VIX position performs unexpectedly, Defiance Nasdaq 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 Defiance Nasdaq will offset losses from the drop in Defiance Nasdaq'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 |
| Defiance Nasdaq vs. Freedom Day Dividend | Defiance Nasdaq vs. Franklin Templeton ETF | Defiance Nasdaq vs. iShares MSCI China | Defiance Nasdaq vs. Tidal Trust II |
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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