diversifiable risk of combining ProShares VIX and Tidal ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares VIX Short Term and Tidal ETF Trust, you can compare the effects of market volatilities on ProShares VIX and Tidal 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 Tidal ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares VIX and Tidal ETF.
Diversification Opportunities for ProShares VIX and Tidal ETF
Pair Corralation between ProShares VIX and Tidal ETF
Given the investment horizon of 90 days ProShares VIX Short Term is expected to under-perform the Tidal ETF. In addition to that, ProShares VIX is 2.59 times more volatile than Tidal ETF Trust. It trades about -0.1 of its total potential returns per unit of risk. Tidal ETF Trust is currently generating about -0.09 per unit of volatility. If you would invest 1,361 in Tidal ETF Trust on December 1, 2023 and sell it today you would lose (54.00) from holding Tidal ETF Trust or give up 3.97% of portfolio value over 90 days.
|3 Months [change]
ProShares VIX Short-Term vs. Tidal ETF Trust
ProShares VIX and Tidal ETF Volatility Contrast
Pair Trading with ProShares VIX and Tidal ETFThe main advantage of trading using opposite ProShares VIX and Tidal ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares VIX position performs unexpectedly, Tidal 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 Tidal ETF will offset losses from the drop in Tidal ETF's long position. The idea behind ProShares VIX Short Term and Tidal ETF Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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