Correlation Between Direxion Daily and Cowen
Can any of the company-specific risk be diversified away by investing in both Direxion Daily and Cowen 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 Cowen 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 Cowen Group, you can compare the effects of market volatilities on Direxion Daily and Cowen 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 Cowen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and Cowen.
Diversification Opportunities for Direxion Daily and Cowen
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Direxion and Cowen is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Mid and Cowen Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cowen Group 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 Cowen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cowen Group has no effect on the direction of Direxion Daily i.e., Direxion Daily and Cowen go up and down completely randomly.
Pair Corralation between Direxion Daily and Cowen
If you would invest 5,321 in Direxion Daily Mid on September 3, 2024 and sell it today you would earn a total of 1,411 from holding Direxion Daily Mid or generate 26.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 2.38% |
| Values | Daily Returns |
Direxion Daily Mid vs. Cowen Group
Performance |
| Timeline |
| Direxion Daily Mid |
| Cowen Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Direxion Daily and Cowen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Daily and Cowen
The main advantage of trading using opposite Direxion Daily and Cowen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, Cowen 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 Cowen will offset losses from the drop in Cowen'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 |
| Cowen vs. Ihuman Inc | Cowen vs. Where Food Comes | Cowen vs. Cadence Design Systems | Cowen vs. Zane Interactive Publishing |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |