Correlation Between Direxion Daily and IShares MSCI
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By analyzing existing cross correlation between Direxion Daily Mid and iShares MSCI ACWI, you can compare the effects of market volatilities on Direxion Daily and IShares MSCI 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 IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and IShares MSCI.
Diversification Opportunities for Direxion Daily and IShares MSCI
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Direxion and IShares is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Mid and iShares MSCI ACWI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI ACWI 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 IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI ACWI has no effect on the direction of Direxion Daily i.e., Direxion Daily and IShares MSCI go up and down completely randomly.
Pair Corralation between Direxion Daily and IShares MSCI
Given the investment horizon of 90 days Direxion Daily Mid is expected to generate 3.67 times more return on investment than IShares MSCI. However, Direxion Daily is 3.67 times more volatile than iShares MSCI ACWI. It trades about 0.05 of its potential returns per unit of risk. iShares MSCI ACWI is currently generating about 0.13 per unit of risk. If you would invest 3,403 in Direxion Daily Mid on September 12, 2024 and sell it today you would earn a total of 2,865 from holding Direxion Daily Mid or generate 84.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 77.78% |
| Values | Daily Returns |
Direxion Daily Mid vs. iShares MSCI ACWI
Performance |
| Timeline |
| Direxion Daily Mid |
| iShares MSCI ACWI |
Direxion Daily and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Daily and IShares MSCI
The main advantage of trading using opposite Direxion Daily and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, IShares MSCI 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 IShares MSCI will offset losses from the drop in IShares MSCI'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 |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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