Lunar Tides, the VIX and Volatility

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This is part 2 of a two-part series on analogies used in investment management. Analogies play an important role as heuristics to aid in discovery and comprehension. But the problem with many of those analogies is that they are shopworn, stale, and tired tropes.

This article explains how the VIX® Index and volatility revert to the mean and why a variance risk premium occurs.