Correlation Between Direxion Daily and ETRACS Alerian
Can any of the company-specific risk be diversified away by investing in both Direxion Daily and ETRACS Alerian at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Direxion Daily and ETRACS Alerian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Direxion Daily Regional and ETRACS Alerian Midstream, you can compare the effects of market volatilities on Direxion Daily and ETRACS Alerian 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 Direxion Daily with a short position of ETRACS Alerian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and ETRACS Alerian.
Diversification Opportunities for Direxion Daily and ETRACS Alerian
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Direxion and ETRACS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Regional and ETRACS Alerian Midstream in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETRACS Alerian Midstream and Direxion Daily is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Direxion Daily Regional are associated (or correlated) with ETRACS Alerian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETRACS Alerian Midstream has no effect on the direction of Direxion Daily i.e., Direxion Daily and ETRACS Alerian go up and down completely randomly.
Pair Corralation between Direxion Daily and ETRACS Alerian
If you would invest 6,205 in Direxion Daily Regional on September 5, 2024 and sell it today you would earn a total of 8,562 from holding Direxion Daily Regional or generate 137.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Direxion Daily Regional vs. ETRACS Alerian Midstream
Performance |
| Timeline |
| Direxion Daily Regional |
| ETRACS Alerian Midstream |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Direxion Daily and ETRACS Alerian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Daily and ETRACS Alerian
The main advantage of trading using opposite Direxion Daily and ETRACS Alerian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, ETRACS Alerian 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 ETRACS Alerian will offset losses from the drop in ETRACS Alerian's long position.| Direxion Daily vs. ProShares Ultra SP500 | Direxion Daily vs. ProShares Ultra QQQ | Direxion Daily vs. MicroSectors FANG Index | Direxion Daily vs. ProShares Ultra Financials |
| ETRACS Alerian vs. Ultimus Managers Trust | ETRACS Alerian vs. American Beacon Select | ETRACS Alerian vs. Direxion Daily Regional | ETRACS Alerian vs. Direxion Daily SP |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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