Correlation Between Direxion Daily and Guinness Atkinson
Can any of the company-specific risk be diversified away by investing in both Direxion Daily and Guinness Atkinson 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 Guinness Atkinson 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 Guinness Atkinson Funds, you can compare the effects of market volatilities on Direxion Daily and Guinness Atkinson 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 Guinness Atkinson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and Guinness Atkinson.
Diversification Opportunities for Direxion Daily and Guinness Atkinson
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Direxion and Guinness is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Regional and Guinness Atkinson Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guinness Atkinson Funds 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 Guinness Atkinson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guinness Atkinson Funds has no effect on the direction of Direxion Daily i.e., Direxion Daily and Guinness Atkinson go up and down completely randomly.
Pair Corralation between Direxion Daily and Guinness Atkinson
Given the investment horizon of 90 days Direxion Daily Regional is expected to generate 5.04 times more return on investment than Guinness Atkinson. However, Direxion Daily is 5.04 times more volatile than Guinness Atkinson Funds. It trades about 0.02 of its potential returns per unit of risk. Guinness Atkinson Funds is currently generating about -0.01 per unit of risk. If you would invest 22,797 in Direxion Daily Regional on August 30, 2024 and sell it today you would lose (6,978) from holding Direxion Daily Regional or give up 30.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Direxion Daily Regional vs. Guinness Atkinson Funds
Performance |
| Timeline |
| Direxion Daily Regional |
| Guinness Atkinson Funds |
Direxion Daily and Guinness Atkinson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Daily and Guinness Atkinson
The main advantage of trading using opposite Direxion Daily and Guinness Atkinson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, Guinness Atkinson 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 Guinness Atkinson will offset losses from the drop in Guinness Atkinson's long position.| Direxion Daily vs. Direxion Daily Homebuilders | Direxion Daily vs. Direxion Daily Retail | Direxion Daily vs. Direxion Daily Transportation | Direxion Daily vs. Direxion Daily Aerospace |
| Guinness Atkinson vs. GraniteShares 125x Long | Guinness Atkinson vs. Emeren Group | Guinness Atkinson vs. Ascent Solar Technologies, | Guinness Atkinson vs. Spire Global |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Transaction History View history of all your transactions and understand their impact on performance |