Correlation Between Direxion Hilton and Cohen Steers
Can any of the company-specific risk be diversified away by investing in both Direxion Hilton and Cohen Steers 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 Hilton and Cohen Steers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Direxion Hilton Tactical and Cohen Steers Closed, you can compare the effects of market volatilities on Direxion Hilton and Cohen Steers 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 Hilton with a short position of Cohen Steers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Hilton and Cohen Steers.
Diversification Opportunities for Direxion Hilton and Cohen Steers
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Direxion and Cohen is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Hilton Tactical and Cohen Steers Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Closed and Direxion Hilton 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 Hilton Tactical are associated (or correlated) with Cohen Steers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cohen Steers Closed has no effect on the direction of Direxion Hilton i.e., Direxion Hilton and Cohen Steers go up and down completely randomly.
Pair Corralation between Direxion Hilton and Cohen Steers
Assuming the 90 days horizon Direxion Hilton Tactical is expected to generate 0.54 times more return on investment than Cohen Steers. However, Direxion Hilton Tactical is 1.84 times less risky than Cohen Steers. It trades about -0.01 of its potential returns per unit of risk. Cohen Steers Closed is currently generating about -0.02 per unit of risk. If you would invest 1,828 in Direxion Hilton Tactical on November 25, 2024 and sell it today you would lose (1.00) from holding Direxion Hilton Tactical or give up 0.05% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Direxion Hilton Tactical vs. Cohen Steers Closed
Performance |
Timeline |
Direxion Hilton Tactical |
Cohen Steers Closed |
Direxion Hilton and Cohen Steers Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Direxion Hilton and Cohen Steers
The main advantage of trading using opposite Direxion Hilton and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Hilton position performs unexpectedly, Cohen Steers 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 Cohen Steers will offset losses from the drop in Cohen Steers' long position.Direxion Hilton vs. Direxion Hilton Tactical | ||
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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