Correlation Between Direxion Daily and Silver Elephant
Can any of the company-specific risk be diversified away by investing in both Direxion Daily and Silver Elephant 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 Silver Elephant 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 Silver Elephant Mining, you can compare the effects of market volatilities on Direxion Daily and Silver Elephant 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 Silver Elephant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and Silver Elephant.
Diversification Opportunities for Direxion Daily and Silver Elephant
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Direxion and Silver is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Mid and Silver Elephant Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Elephant Mining 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 Silver Elephant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Elephant Mining has no effect on the direction of Direxion Daily i.e., Direxion Daily and Silver Elephant go up and down completely randomly.
Pair Corralation between Direxion Daily and Silver Elephant
Given the investment horizon of 90 days Direxion Daily is expected to generate 1.53 times less return on investment than Silver Elephant. But when comparing it to its historical volatility, Direxion Daily Mid is 2.11 times less risky than Silver Elephant. It trades about 0.07 of its potential returns per unit of risk. Silver Elephant Mining is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 31.00 in Silver Elephant Mining on September 12, 2024 and sell it today you would earn a total of 11.00 from holding Silver Elephant Mining or generate 35.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Direxion Daily Mid vs. Silver Elephant Mining
Performance |
| Timeline |
| Direxion Daily Mid |
| Silver Elephant Mining |
Direxion Daily and Silver Elephant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Daily and Silver Elephant
The main advantage of trading using opposite Direxion Daily and Silver Elephant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, Silver Elephant 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 Silver Elephant will offset losses from the drop in Silver Elephant'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 |
| Silver Elephant vs. Silver One Resources | Silver Elephant vs. Aftermath Silver | Silver Elephant vs. AbraSilver Resource Corp | Silver Elephant vs. Reyna Silver Corp |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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