Correlation Between Direxion Daily and DAEDUCK ELECTRONICS
Can any of the company-specific risk be diversified away by investing in both Direxion Daily and DAEDUCK ELECTRONICS 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 DAEDUCK ELECTRONICS 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 DAEDUCK ELECTRONICS CoLtd, you can compare the effects of market volatilities on Direxion Daily and DAEDUCK ELECTRONICS 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 DAEDUCK ELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and DAEDUCK ELECTRONICS.
Diversification Opportunities for Direxion Daily and DAEDUCK ELECTRONICS
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Direxion and DAEDUCK is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Mid and DAEDUCK ELECTRONICS CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAEDUCK ELECTRONICS CoLtd 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 DAEDUCK ELECTRONICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAEDUCK ELECTRONICS CoLtd has no effect on the direction of Direxion Daily i.e., Direxion Daily and DAEDUCK ELECTRONICS go up and down completely randomly.
Pair Corralation between Direxion Daily and DAEDUCK ELECTRONICS
Given the investment horizon of 90 days Direxion Daily Mid is expected to generate 2.33 times more return on investment than DAEDUCK ELECTRONICS. However, Direxion Daily is 2.33 times more volatile than DAEDUCK ELECTRONICS CoLtd. It trades about 0.1 of its potential returns per unit of risk. DAEDUCK ELECTRONICS CoLtd is currently generating about -0.05 per unit of risk. If you would invest 4,761 in Direxion Daily Mid on September 5, 2024 and sell it today you would earn a total of 1,859 from holding Direxion Daily Mid or generate 39.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.6% |
| Values | Daily Returns |
Direxion Daily Mid vs. DAEDUCK ELECTRONICS CoLtd
Performance |
| Timeline |
| Direxion Daily Mid |
| DAEDUCK ELECTRONICS CoLtd |
Direxion Daily and DAEDUCK ELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Daily and DAEDUCK ELECTRONICS
The main advantage of trading using opposite Direxion Daily and DAEDUCK ELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, DAEDUCK ELECTRONICS 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 DAEDUCK ELECTRONICS will offset losses from the drop in DAEDUCK ELECTRONICS'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 |
| DAEDUCK ELECTRONICS vs. Iljin Display | DAEDUCK ELECTRONICS vs. Sungmoon Electronics Co | DAEDUCK ELECTRONICS vs. Busan Industrial Co | DAEDUCK ELECTRONICS vs. UNISEM Co |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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