Correlation Between Direxion and Global X
Can any of the company-specific risk be diversified away by investing in both Direxion and Global X 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 and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Direxion and Global X Hydrogen, you can compare the effects of market volatilities on Direxion and Global X 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 with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion and Global X.
Diversification Opportunities for Direxion and Global X
Pay attention - limited upside
The 3 months correlation between Direxion and Global is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Direxion and Global X Hydrogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Hydrogen and Direxion 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 are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Hydrogen has no effect on the direction of Direxion i.e., Direxion and Global X go up and down completely randomly.
Pair Corralation between Direxion and Global X
If you would invest 2,185 in Global X Hydrogen on August 25, 2024 and sell it today you would earn a total of 167.00 from holding Global X Hydrogen or generate 7.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Direxion vs. Global X Hydrogen
Performance |
| Timeline |
| Direxion |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Global X Hydrogen |
Direxion and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion and Global X
The main advantage of trading using opposite Direxion and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| Direxion vs. Direxion Daily SP | Direxion vs. Direxion Daily Semiconductor | Direxion vs. Direxion Daily Semiconductor |
| Global X vs. Defiance Next Gen | Global X vs. Global X Blockchain | Global X vs. Global X AgTech | Global X vs. Global X CleanTech |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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