Correlation Between Mast Global and Direxion
Can any of the company-specific risk be diversified away by investing in both Mast Global and Direxion 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 Mast Global and Direxion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mast Global Battery and Direxion, you can compare the effects of market volatilities on Mast Global and Direxion 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 Mast Global with a short position of Direxion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mast Global and Direxion.
Diversification Opportunities for Mast Global and Direxion
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mast and Direxion is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Mast Global Battery and Direxion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direxion and Mast Global 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 Mast Global Battery are associated (or correlated) with Direxion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direxion has no effect on the direction of Mast Global i.e., Mast Global and Direxion go up and down completely randomly.
Pair Corralation between Mast Global and Direxion
Allowing for the 90-day total investment horizon Mast Global Battery is expected to generate 0.75 times more return on investment than Direxion. However, Mast Global Battery is 1.34 times less risky than Direxion. It trades about 0.02 of its potential returns per unit of risk. Direxion is currently generating about -0.21 per unit of risk. If you would invest 2,439 in Mast Global Battery on August 25, 2024 and sell it today you would earn a total of 76.00 from holding Mast Global Battery or generate 3.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 29.92% |
| Values | Daily Returns |
Mast Global Battery vs. Direxion
Performance |
| Timeline |
| Mast Global Battery |
| Direxion |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Mast Global and Direxion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mast Global and Direxion
The main advantage of trading using opposite Mast Global and Direxion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mast Global position performs unexpectedly, Direxion 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 will offset losses from the drop in Direxion's long position.| Mast Global vs. iShares Dividend and | Mast Global vs. Martin Currie Sustainable | Mast Global vs. VictoryShares THB Mid | Mast Global vs. AdvisorShares Gerber Kawasaki |
| Direxion vs. Sprott Junior Copper | Direxion vs. Sprott Junior Uranium | Direxion vs. Sprott Nickel Miners |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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