Correlation Between Direxion Daily and Absa Multi
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By analyzing existing cross correlation between Direxion Daily Mid and Absa Multi Managed, you can compare the effects of market volatilities on Direxion Daily and Absa Multi 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 Absa Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and Absa Multi.
Diversification Opportunities for Direxion Daily and Absa Multi
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Direxion and Absa is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Mid and Absa Multi Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Absa Multi Managed 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 Absa Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Absa Multi Managed has no effect on the direction of Direxion Daily i.e., Direxion Daily and Absa Multi go up and down completely randomly.
Pair Corralation between Direxion Daily and Absa Multi
Given the investment horizon of 90 days Direxion Daily Mid is expected to generate 7.36 times more return on investment than Absa Multi. However, Direxion Daily is 7.36 times more volatile than Absa Multi Managed. It trades about 0.06 of its potential returns per unit of risk. Absa Multi Managed is currently generating about 0.09 per unit of risk. If you would invest 3,515 in Direxion Daily Mid on September 5, 2024 and sell it today you would earn a total of 3,105 from holding Direxion Daily Mid or generate 88.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.79% |
| Values | Daily Returns |
Direxion Daily Mid vs. Absa Multi Managed
Performance |
| Timeline |
| Direxion Daily Mid |
| Absa Multi Managed |
Direxion Daily and Absa Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Daily and Absa Multi
The main advantage of trading using opposite Direxion Daily and Absa Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, Absa Multi 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 Absa Multi will offset losses from the drop in Absa Multi'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 |
| Absa Multi vs. Sasol Ltd Bee | Absa Multi vs. Centaur Bci Balanced | Absa Multi vs. Sabvest Capital | Absa Multi vs. Growthpoint Properties |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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