Correlation Between Direxion Daily and Amundi Nasdaq
Can any of the company-specific risk be diversified away by investing in both Direxion Daily and Amundi Nasdaq 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 Amundi Nasdaq 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 Amundi Nasdaq 100 UCITS, you can compare the effects of market volatilities on Direxion Daily and Amundi Nasdaq 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 Amundi Nasdaq. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and Amundi Nasdaq.
Diversification Opportunities for Direxion Daily and Amundi Nasdaq
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Direxion and Amundi is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Mid and Amundi Nasdaq 100 UCITS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi Nasdaq 100 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 Amundi Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi Nasdaq 100 has no effect on the direction of Direxion Daily i.e., Direxion Daily and Amundi Nasdaq go up and down completely randomly.
Pair Corralation between Direxion Daily and Amundi Nasdaq
Given the investment horizon of 90 days Direxion Daily Mid is expected to generate 3.03 times more return on investment than Amundi Nasdaq. However, Direxion Daily is 3.03 times more volatile than Amundi Nasdaq 100 UCITS. It trades about 0.06 of its potential returns per unit of risk. Amundi Nasdaq 100 UCITS is currently generating about 0.1 per unit of risk. If you would invest 3,730 in Direxion Daily Mid on September 12, 2024 and sell it today you would earn a total of 2,538 from holding Direxion Daily Mid or generate 68.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.68% |
| Values | Daily Returns |
Direxion Daily Mid vs. Amundi Nasdaq 100 UCITS
Performance |
| Timeline |
| Direxion Daily Mid |
| Amundi Nasdaq 100 |
Direxion Daily and Amundi Nasdaq Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Daily and Amundi Nasdaq
The main advantage of trading using opposite Direxion Daily and Amundi Nasdaq positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, Amundi Nasdaq 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 Amundi Nasdaq will offset losses from the drop in Amundi Nasdaq'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 |
| Amundi Nasdaq vs. Amundi EUR High | Amundi Nasdaq vs. Amundi Index Solutions | Amundi Nasdaq vs. Amundi MSCI Pacific | Amundi Nasdaq vs. Amundi MSCI Europe |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |