Correlation Between Direxion Daily and Gilead Sciences
Can any of the company-specific risk be diversified away by investing in both Direxion Daily and Gilead Sciences 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 Gilead Sciences 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 Gilead Sciences, you can compare the effects of market volatilities on Direxion Daily and Gilead Sciences 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 Gilead Sciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and Gilead Sciences.
Diversification Opportunities for Direxion Daily and Gilead Sciences
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Direxion and Gilead is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily FTSE and Gilead Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gilead Sciences 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 Gilead Sciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gilead Sciences has no effect on the direction of Direxion Daily i.e., Direxion Daily and Gilead Sciences go up and down completely randomly.
Pair Corralation between Direxion Daily and Gilead Sciences
Given the investment horizon of 90 days Direxion Daily FTSE is expected to generate 1.87 times more return on investment than Gilead Sciences. However, Direxion Daily is 1.87 times more volatile than Gilead Sciences. It trades about 0.02 of its potential returns per unit of risk. Gilead Sciences is currently generating about 0.03 per unit of risk. If you would invest 2,071 in Direxion Daily FTSE on September 1, 2024 and sell it today you would earn a total of 197.00 from holding Direxion Daily FTSE or generate 9.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Direxion Daily FTSE vs. Gilead Sciences
Performance |
| Timeline |
| Direxion Daily FTSE |
| Gilead Sciences |
Direxion Daily and Gilead Sciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Daily and Gilead Sciences
The main advantage of trading using opposite Direxion Daily and Gilead Sciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, Gilead Sciences 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 Gilead Sciences will offset losses from the drop in Gilead Sciences' long position.| Direxion Daily vs. Direxion Daily South | Direxion Daily vs. Direxion Daily Mid | Direxion Daily vs. Direxion Daily MSCI | Direxion Daily vs. Direxion Daily MSCI |
| Gilead Sciences vs. Tff Pharmaceuticals | Gilead Sciences vs. Eliem Therapeutics | Gilead Sciences vs. Inhibrx | Gilead Sciences vs. Enliven Therapeutics |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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