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
Very weak diversification
The 3 months correlation between Direxion and Global is 0.5. 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
Given the investment horizon of 90 days Direxion is expected to generate 0.7 times more return on investment than Global X. However, Direxion is 1.42 times less risky than Global X. It trades about 0.01 of its potential returns per unit of risk. Global X Hydrogen is currently generating about -0.03 per unit of risk. If you would invest 1,078 in Direxion on November 4, 2024 and sell it today you would earn a total of 2.00 from holding Direxion or generate 0.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 45.75% |
| 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. Global X Hydrogen | Direxion vs. Defiance Next Gen | Direxion vs. Fusion Fuel Green | Direxion vs. Amplify Lithium Battery |
| 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |