Correlation Between Direxion Daily and PT Indosat
Can any of the company-specific risk be diversified away by investing in both Direxion Daily and PT Indosat 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 PT Indosat 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 PT Indosat Tbk, you can compare the effects of market volatilities on Direxion Daily and PT Indosat 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 PT Indosat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and PT Indosat.
Diversification Opportunities for Direxion Daily and PT Indosat
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Direxion and PTITF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily FTSE and PT Indosat Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Indosat Tbk 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 PT Indosat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Indosat Tbk has no effect on the direction of Direxion Daily i.e., Direxion Daily and PT Indosat go up and down completely randomly.
Pair Corralation between Direxion Daily and PT Indosat
Given the investment horizon of 90 days Direxion Daily FTSE is expected to under-perform the PT Indosat. But the etf apears to be less risky and, when comparing its historical volatility, Direxion Daily FTSE is 17.24 times less risky than PT Indosat. The etf trades about -0.05 of its potential returns per unit of risk. The PT Indosat Tbk is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 72.00 in PT Indosat Tbk on September 1, 2024 and sell it today you would lose (9.00) from holding PT Indosat Tbk or give up 12.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Direxion Daily FTSE vs. PT Indosat Tbk
Performance |
| Timeline |
| Direxion Daily FTSE |
| PT Indosat Tbk |
Direxion Daily and PT Indosat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Daily and PT Indosat
The main advantage of trading using opposite Direxion Daily and PT Indosat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, PT Indosat 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 PT Indosat will offset losses from the drop in PT Indosat's 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 |
| PT Indosat vs. Singapore Telecommunications Limited | PT Indosat vs. China Tower | PT Indosat vs. Vodafone Group PLC | PT Indosat vs. MTN Group Ltd |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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