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r/stocksr/stocks· u/endelcastillo· 4d agoAdvice Request 1

Volatility vs Index or ETF

Investor summaryNeutral

Author asks why volatility indices sometimes correlate directly with market indices/ETFs instead of the usual inverse relationship.

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Typically, there is an inverse relationship between the movement of a volatility index and it’s corresponding market index or etf ($VIX & $SPX or $SPY, $VXN & $NDX or $QQQ, $VXD & $DJI or $DIA). At times, though, there is a direct relationship. (Like today between $VXD & $DIA on the weekly chart).

What is happening for the market to, at times, create a direct relationship between a volatility index and a market index or etf?

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