Correlation Between Janus Detroit and Direxion Daily
Can any of the company-specific risk be diversified away by investing in both Janus Detroit and Direxion Daily 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 Janus Detroit and Direxion Daily into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Janus Detroit Street and Direxion Daily Select, you can compare the effects of market volatilities on Janus Detroit and Direxion Daily 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 Janus Detroit with a short position of Direxion Daily. Check out your portfolio center. Please also check ongoing floating volatility patterns of Janus Detroit and Direxion Daily.
Diversification Opportunities for Janus Detroit and Direxion Daily
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Janus and Direxion is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Janus Detroit Street and Direxion Daily Select in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direxion Daily Select and Janus Detroit 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 Janus Detroit Street are associated (or correlated) with Direxion Daily. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direxion Daily Select has no effect on the direction of Janus Detroit i.e., Janus Detroit and Direxion Daily go up and down completely randomly.
Pair Corralation between Janus Detroit and Direxion Daily
Given the investment horizon of 90 days Janus Detroit is expected to generate 8.22 times less return on investment than Direxion Daily. But when comparing it to its historical volatility, Janus Detroit Street is 13.57 times less risky than Direxion Daily. It trades about 0.2 of its potential returns per unit of risk. Direxion Daily Select is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 4,249 in Direxion Daily Select on October 1, 2024 and sell it today you would earn a total of 14,743 from holding Direxion Daily Select or generate 346.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Janus Detroit Street vs. Direxion Daily Select
Performance |
| Timeline |
| Janus Detroit Street |
| Direxion Daily Select |
Janus Detroit and Direxion Daily Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Janus Detroit and Direxion Daily
The main advantage of trading using opposite Janus Detroit and Direxion Daily positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Janus Detroit position performs unexpectedly, Direxion Daily 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 Daily will offset losses from the drop in Direxion Daily's long position.| Janus Detroit vs. Janus Detroit Street | Janus Detroit vs. VanEck ETF Trust | Janus Detroit vs. Janus Henderson Mortgage Backed | Janus Detroit vs. BlackRock AAA CLO |
| Direxion Daily vs. Direxion Daily SP500 | Direxion Daily vs. ProShares UltraPro SP500 | Direxion Daily vs. ProShares Ultra Financials |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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