The VIX provides insight into market expectations and investor sentiment, making it a valuable tool for portfolio risk assessment. It helps traders anticipate periods of high volatility, allowing them to hedge positions or capitalize on price swings. The VIX is also used in derivative markets, with VIX futures and options enabling investors to trade on volatility without directly holding equities. Understanding VIX trends can improve decision-making for asset allocation and risk management strategies. Monitor VIX trends to identify potential market corrections or rallies.