Correlation Between Direxion Daily and Expat Croatia
Can any of the company-specific risk be diversified away by investing in both Direxion Daily and Expat Croatia 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 Expat Croatia 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 Expat Croatia Crobex, you can compare the effects of market volatilities on Direxion Daily and Expat Croatia 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 Expat Croatia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and Expat Croatia.
Diversification Opportunities for Direxion Daily and Expat Croatia
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Direxion and Expat is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Mid and Expat Croatia Crobex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expat Croatia Crobex 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 Expat Croatia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expat Croatia Crobex has no effect on the direction of Direxion Daily i.e., Direxion Daily and Expat Croatia go up and down completely randomly.
Pair Corralation between Direxion Daily and Expat Croatia
Given the investment horizon of 90 days Direxion Daily Mid is expected to generate 2.37 times more return on investment than Expat Croatia. However, Direxion Daily is 2.37 times more volatile than Expat Croatia Crobex. It trades about 0.05 of its potential returns per unit of risk. Expat Croatia Crobex is currently generating about 0.07 per unit of risk. If you would invest 3,830 in Direxion Daily Mid on September 3, 2024 and sell it today you would earn a total of 2,902 from holding Direxion Daily Mid or generate 75.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.21% |
| Values | Daily Returns |
Direxion Daily Mid vs. Expat Croatia Crobex
Performance |
| Timeline |
| Direxion Daily Mid |
| Expat Croatia Crobex |
Direxion Daily and Expat Croatia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Daily and Expat Croatia
The main advantage of trading using opposite Direxion Daily and Expat Croatia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, Expat Croatia 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 Expat Croatia will offset losses from the drop in Expat Croatia'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 |
| Expat Croatia vs. Expat Czech PX | Expat Croatia vs. Expat Serbia Belex15 | Expat Croatia vs. Expat Poland WIG20 | Expat Croatia vs. Expat Slovenia SBI |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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