Correlation Between Brinker International and Direxion Daily
Can any of the company-specific risk be diversified away by investing in both Brinker International and Direxion Daily 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 Brinker International and Direxion Daily into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brinker International and Direxion Daily FTSE, you can compare the effects of market volatilities on Brinker International and Direxion Daily 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 Brinker International with a short position of Direxion Daily. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brinker International and Direxion Daily.
Diversification Opportunities for Brinker International and Direxion Daily
-0.92 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Brinker and Direxion is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding Brinker International and Direxion Daily FTSE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direxion Daily FTSE and Brinker International 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 Brinker International are associated (or correlated) with Direxion Daily. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direxion Daily FTSE has no effect on the direction of Brinker International i.e., Brinker International and Direxion Daily go up and down completely randomly.
Pair Corralation between Brinker International and Direxion Daily
Considering the 90-day investment horizon Brinker International is expected to generate 0.81 times more return on investment than Direxion Daily. However, Brinker International is 1.23 times less risky than Direxion Daily. It trades about 0.53 of its potential returns per unit of risk. Direxion Daily FTSE is currently generating about -0.1 per unit of risk. If you would invest 10,271 in Brinker International on September 1, 2024 and sell it today you would earn a total of 2,956 from holding Brinker International or generate 28.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brinker International vs. Direxion Daily FTSE
Performance |
| Timeline |
| Brinker International |
| Direxion Daily FTSE |
Brinker International and Direxion Daily Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brinker International and Direxion Daily
The main advantage of trading using opposite Brinker International and Direxion Daily positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brinker International position performs unexpectedly, Direxion Daily 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 Direxion Daily will offset losses from the drop in Direxion Daily's long position.| Brinker International vs. Dennys Corp | Brinker International vs. Bloomin Brands | Brinker International vs. Jack In The | Brinker International vs. Dine Brands Global |
| Direxion Daily vs. Direxion Daily South | Direxion Daily vs. Direxion Daily Mid | Direxion Daily vs. Direxion Daily MSCI | Direxion Daily vs. Direxion Daily MSCI |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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