Correlation Between Direxion Daily and Singapore Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Direxion Daily and Singapore Telecommunicatio 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 Singapore Telecommunicatio 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 Singapore Telecommunications PK, you can compare the effects of market volatilities on Direxion Daily and Singapore Telecommunicatio 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 Singapore Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and Singapore Telecommunicatio.
Diversification Opportunities for Direxion Daily and Singapore Telecommunicatio
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Direxion and Singapore is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily FTSE and Singapore Telecommunications P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Telecommunicatio 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 Singapore Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore Telecommunicatio has no effect on the direction of Direxion Daily i.e., Direxion Daily and Singapore Telecommunicatio go up and down completely randomly.
Pair Corralation between Direxion Daily and Singapore Telecommunicatio
Given the investment horizon of 90 days Direxion Daily FTSE is expected to generate 1.89 times more return on investment than Singapore Telecommunicatio. However, Direxion Daily is 1.89 times more volatile than Singapore Telecommunications PK. It trades about 0.27 of its potential returns per unit of risk. Singapore Telecommunications PK is currently generating about 0.15 per unit of risk. If you would invest 2,426 in Direxion Daily FTSE on November 28, 2024 and sell it today you would earn a total of 332.00 from holding Direxion Daily FTSE or generate 13.69% 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. Singapore Telecommunications P
Performance |
| Timeline |
| Direxion Daily FTSE |
| Singapore Telecommunicatio |
Direxion Daily and Singapore Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Daily and Singapore Telecommunicatio
The main advantage of trading using opposite Direxion Daily and Singapore Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, Singapore Telecommunicatio 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 Singapore Telecommunicatio will offset losses from the drop in Singapore Telecommunicatio'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 |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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