Correlation Between Direxion Daily and Fidelity Tactical
Can any of the company-specific risk be diversified away by investing in both Direxion Daily and Fidelity Tactical 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 Fidelity Tactical 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 Fidelity Tactical Bond, you can compare the effects of market volatilities on Direxion Daily and Fidelity Tactical 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 Fidelity Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and Fidelity Tactical.
Diversification Opportunities for Direxion Daily and Fidelity Tactical
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Direxion and Fidelity is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Regional and Fidelity Tactical Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Tactical Bond 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 Fidelity Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Tactical Bond has no effect on the direction of Direxion Daily i.e., Direxion Daily and Fidelity Tactical go up and down completely randomly.
Pair Corralation between Direxion Daily and Fidelity Tactical
Given the investment horizon of 90 days Direxion Daily Regional is expected to generate 25.04 times more return on investment than Fidelity Tactical. However, Direxion Daily is 25.04 times more volatile than Fidelity Tactical Bond. It trades about 0.24 of its potential returns per unit of risk. Fidelity Tactical Bond is currently generating about 0.17 per unit of risk. If you would invest 10,482 in Direxion Daily Regional on September 3, 2024 and sell it today you would earn a total of 5,162 from holding Direxion Daily Regional or generate 49.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Direxion Daily Regional vs. Fidelity Tactical Bond
Performance |
| Timeline |
| Direxion Daily Regional |
| Fidelity Tactical Bond |
Direxion Daily and Fidelity Tactical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Daily and Fidelity Tactical
The main advantage of trading using opposite Direxion Daily and Fidelity Tactical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, Fidelity Tactical 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 Fidelity Tactical will offset losses from the drop in Fidelity Tactical's long position.| Direxion Daily vs. ProShares Ultra SP500 | Direxion Daily vs. Direxion Daily SP500 | Direxion Daily vs. ProShares Ultra QQQ | Direxion Daily vs. Direxion Daily SP |
| Fidelity Tactical vs. Fidelity Investment Grade | Fidelity Tactical vs. Fidelity Investment Grade | Fidelity Tactical vs. Fidelity Sustainable Low | Fidelity Tactical vs. Fidelity Preferred Securities |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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