Correlation Between Direxion Daily and Amgen
Can any of the company-specific risk be diversified away by investing in both Direxion Daily and Amgen 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 Amgen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Direxion Daily FTSE and Amgen Inc, you can compare the effects of market volatilities on Direxion Daily and Amgen 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 Amgen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and Amgen.
Diversification Opportunities for Direxion Daily and Amgen
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Direxion and Amgen is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily FTSE and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc 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 FTSE are associated (or correlated) with Amgen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amgen Inc has no effect on the direction of Direxion Daily i.e., Direxion Daily and Amgen go up and down completely randomly.
Pair Corralation between Direxion Daily and Amgen
Given the investment horizon of 90 days Direxion Daily FTSE is expected to generate 1.83 times more return on investment than Amgen. However, Direxion Daily is 1.83 times more volatile than Amgen Inc. It trades about 0.03 of its potential returns per unit of risk. Amgen Inc is currently generating about 0.01 per unit of risk. If you would invest 1,713 in Direxion Daily FTSE on August 29, 2024 and sell it today you would earn a total of 471.00 from holding Direxion Daily FTSE or generate 27.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Direxion Daily FTSE vs. Amgen Inc
Performance |
| Timeline |
| Direxion Daily FTSE |
| Amgen Inc |
Direxion Daily and Amgen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Daily and Amgen
The main advantage of trading using opposite Direxion Daily and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, Amgen 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 Amgen will offset losses from the drop in Amgen's long position.| Direxion Daily vs. ABIVAX Socit Anonyme | Direxion Daily vs. Morningstar Unconstrained Allocation | Direxion Daily vs. SPACE | Direxion Daily vs. Knife River |
| Amgen vs. Pharvaris BV | Amgen vs. Brinker International | Amgen vs. Alcoa Corp | Amgen vs. Direxion Daily FTSE |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |