So flash back one year ago. Before the financial system nearly imploded, it was rather calm. Cramer called a housing bottom (well, that doesn’t really disinguish is from the other 10 housing bottoms) . And the VIX was almost exactly where it sits now.

In light of this whole correlation excitement, I ran some comparisons of how volatilities of different ETF’s, and a few individual stocks, compared to the VIX on Thursday, a month ago, and a year ago. The “year ago” column is relied on my eyeball estimate of the ETF/stock vols. as the charts did not give exact numbers. But it’s more to compare it from then to now, not get it exactly to the penny.

Anyway, you can see the numbers here. Or you can rely on my description.

Basically, some ETF’s like XLF, XLE, XHB and XRT now trade at implied volatilities significantly cheaper relative to the VIX than they did a year ago. AAPL does too, as does POT to name another one. Other ETF’s like EEM and IYR are not significantly different relative to the VIX. Nor is CAT.

What’s it all mean?

Well, not all that much. I mean if you like the Dispersion Trade, which involves going long individual stock gamma and short index gamma, you can do it at pretty good prices in many spots. That’s the good news. The bad news is I have found from personal experience you really will just churn with the play unless volatility perks up.

In other words, let’s say you go buy AAPL and XRT and XLF options gamma (say long straddles or strangles) vs. short gamma in SPX or SPY. The daily decay you earn on the short gamma should roughly offset what you pay for your long gamma. You are now effectively betting that correlation will decline and/or volatility in these names will lift relative to SPX/SPY volatility. Anecdotally, of all the things to root for, a simple broadbased lift in volatility works best, even if correlation does not budge.