Correlation Between Direxion Daily and 13d Activist
Can any of the company-specific risk be diversified away by investing in both Direxion Daily and 13d Activist 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 13d Activist 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 13d Activist Fund, you can compare the effects of market volatilities on Direxion Daily and 13d Activist 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 13d Activist. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and 13d Activist.
Diversification Opportunities for Direxion Daily and 13d Activist
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Direxion and 13d is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Mid and 13d Activist Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 13d Activist 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 13d Activist. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 13d Activist has no effect on the direction of Direxion Daily i.e., Direxion Daily and 13d Activist go up and down completely randomly.
Pair Corralation between Direxion Daily and 13d Activist
Given the investment horizon of 90 days Direxion Daily Mid is expected to generate 2.92 times more return on investment than 13d Activist. However, Direxion Daily is 2.92 times more volatile than 13d Activist Fund. It trades about 0.09 of its potential returns per unit of risk. 13d Activist Fund is currently generating about 0.06 per unit of risk. If you would invest 3,822 in Direxion Daily Mid on September 4, 2024 and sell it today you would earn a total of 2,843 from holding Direxion Daily Mid or generate 74.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
Direxion Daily Mid vs. 13d Activist Fund
Performance |
| Timeline |
| Direxion Daily Mid |
| 13d Activist |
Direxion Daily and 13d Activist Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Daily and 13d Activist
The main advantage of trading using opposite Direxion Daily and 13d Activist positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, 13d Activist 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 13d Activist will offset losses from the drop in 13d Activist'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 |
| 13d Activist vs. Fidelity Advisor Large | 13d Activist vs. Columbia Select Large Cap | 13d Activist vs. The Disciplined Growth | 13d Activist vs. Aquagold International |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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