Correlation Between Direxion Daily and Sambo Corrugated
Can any of the company-specific risk be diversified away by investing in both Direxion Daily and Sambo Corrugated 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 Daily and Sambo Corrugated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Direxion Daily Mid and Sambo Corrugated Board, you can compare the effects of market volatilities on Direxion Daily and Sambo Corrugated 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 Daily with a short position of Sambo Corrugated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and Sambo Corrugated.
Diversification Opportunities for Direxion Daily and Sambo Corrugated
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Direxion and Sambo is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Mid and Sambo Corrugated Board in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sambo Corrugated Board and Direxion Daily 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 Daily Mid are associated (or correlated) with Sambo Corrugated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sambo Corrugated Board has no effect on the direction of Direxion Daily i.e., Direxion Daily and Sambo Corrugated go up and down completely randomly.
Pair Corralation between Direxion Daily and Sambo Corrugated
Given the investment horizon of 90 days Direxion Daily Mid is expected to generate 3.56 times more return on investment than Sambo Corrugated. However, Direxion Daily is 3.56 times more volatile than Sambo Corrugated Board. It trades about 0.19 of its potential returns per unit of risk. Sambo Corrugated Board is currently generating about -0.14 per unit of risk. If you would invest 4,829 in Direxion Daily Mid on September 5, 2024 and sell it today you would earn a total of 1,791 from holding Direxion Daily Mid or generate 37.09% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 92.19% |
Values | Daily Returns |
Direxion Daily Mid vs. Sambo Corrugated Board
Performance |
Timeline |
Direxion Daily Mid |
Sambo Corrugated Board |
Direxion Daily and Sambo Corrugated Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Direxion Daily and Sambo Corrugated
The main advantage of trading using opposite Direxion Daily and Sambo Corrugated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, Sambo Corrugated 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 Sambo Corrugated will offset losses from the drop in Sambo Corrugated's long position.Direxion Daily vs. Direxion Daily Retail | Direxion Daily vs. Direxion Daily Industrials | Direxion Daily vs. Direxion Daily Transportation | Direxion Daily vs. Direxion Daily FTSE |
Sambo Corrugated vs. Hanil Iron Steel | Sambo Corrugated vs. Pungguk Ethanol Industrial | Sambo Corrugated vs. Dongbu Steel Co | Sambo Corrugated vs. Aprogen Healthcare Games |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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