Correlation Between Direxion Daily and Ivy Cundill
Can any of the company-specific risk be diversified away by investing in both Direxion Daily and Ivy Cundill 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 Ivy Cundill 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 Ivy Cundill Global, you can compare the effects of market volatilities on Direxion Daily and Ivy Cundill 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 Ivy Cundill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and Ivy Cundill.
Diversification Opportunities for Direxion Daily and Ivy Cundill
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Direxion and Ivy is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Mid and Ivy Cundill Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivy Cundill Global 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 Ivy Cundill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivy Cundill Global has no effect on the direction of Direxion Daily i.e., Direxion Daily and Ivy Cundill go up and down completely randomly.
Pair Corralation between Direxion Daily and Ivy Cundill
Given the investment horizon of 90 days Direxion Daily Mid is expected to generate 2.63 times more return on investment than Ivy Cundill. However, Direxion Daily is 2.63 times more volatile than Ivy Cundill Global. It trades about 0.05 of its potential returns per unit of risk. Ivy Cundill Global is currently generating about 0.03 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 | Insignificant |
| Accuracy | 81.62% |
| Values | Daily Returns |
Direxion Daily Mid vs. Ivy Cundill Global
Performance |
| Timeline |
| Direxion Daily Mid |
| Ivy Cundill Global |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Direxion Daily and Ivy Cundill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Daily and Ivy Cundill
The main advantage of trading using opposite Direxion Daily and Ivy Cundill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, Ivy Cundill 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 Ivy Cundill will offset losses from the drop in Ivy Cundill'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 |
| Ivy Cundill vs. Legg Mason Global | Ivy Cundill vs. Siit Global Managed | Ivy Cundill vs. Dreyfusstandish Global Fixed | Ivy Cundill vs. Ab Global Real |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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