Correlation Between Direxion Daily and KraneShares Global
Can any of the company-specific risk be diversified away by investing in both Direxion Daily and KraneShares Global 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 KraneShares Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Direxion Daily SP and KraneShares Global Carbon, you can compare the effects of market volatilities on Direxion Daily and KraneShares Global 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 KraneShares Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and KraneShares Global.
Diversification Opportunities for Direxion Daily and KraneShares Global
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Direxion and KraneShares is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily SP and KraneShares Global Carbon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares Global Carbon 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 SP are associated (or correlated) with KraneShares Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares Global Carbon has no effect on the direction of Direxion Daily i.e., Direxion Daily and KraneShares Global go up and down completely randomly.
Pair Corralation between Direxion Daily and KraneShares Global
Given the investment horizon of 90 days Direxion Daily SP is expected to generate 2.28 times more return on investment than KraneShares Global. However, Direxion Daily is 2.28 times more volatile than KraneShares Global Carbon. It trades about 0.0 of its potential returns per unit of risk. KraneShares Global Carbon is currently generating about -0.02 per unit of risk. If you would invest 1,280 in Direxion Daily SP on September 13, 2024 and sell it today you would lose (247.00) from holding Direxion Daily SP or give up 19.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Direxion Daily SP vs. KraneShares Global Carbon
Performance |
| Timeline |
| Direxion Daily SP |
| KraneShares Global Carbon |
Direxion Daily and KraneShares Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Daily and KraneShares Global
The main advantage of trading using opposite Direxion Daily and KraneShares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, KraneShares Global 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 KraneShares Global will offset losses from the drop in KraneShares Global's long position.| Direxion Daily vs. Ultimus Managers Trust | Direxion Daily vs. EA Series Trust | Direxion Daily vs. Global X MLP | Direxion Daily vs. ETRACS Quarterly Pay |
| KraneShares Global vs. Ultimus Managers Trust | KraneShares Global vs. Direxion Daily SP | KraneShares Global vs. EA Series Trust | KraneShares Global vs. Global X MLP |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |