Correlation Between Direxion Daily and JPMorgan Fundamental
Can any of the company-specific risk be diversified away by investing in both Direxion Daily and JPMorgan Fundamental 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 JPMorgan Fundamental 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 JPMorgan Fundamental Data, you can compare the effects of market volatilities on Direxion Daily and JPMorgan Fundamental 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 JPMorgan Fundamental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and JPMorgan Fundamental.
Diversification Opportunities for Direxion Daily and JPMorgan Fundamental
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Direxion and JPMorgan is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Mid and JPMorgan Fundamental Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Fundamental Data 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 JPMorgan Fundamental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Fundamental Data has no effect on the direction of Direxion Daily i.e., Direxion Daily and JPMorgan Fundamental go up and down completely randomly.
Pair Corralation between Direxion Daily and JPMorgan Fundamental
Given the investment horizon of 90 days Direxion Daily Mid is expected to generate 4.18 times more return on investment than JPMorgan Fundamental. However, Direxion Daily is 4.18 times more volatile than JPMorgan Fundamental Data. It trades about 0.19 of its potential returns per unit of risk. JPMorgan Fundamental Data is currently generating about 0.3 per unit of risk. If you would invest 5,448 in Direxion Daily Mid on August 24, 2024 and sell it today you would earn a total of 823.00 from holding Direxion Daily Mid or generate 15.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Direxion Daily Mid vs. JPMorgan Fundamental Data
Performance |
| Timeline |
| Direxion Daily Mid |
| JPMorgan Fundamental Data |
Direxion Daily and JPMorgan Fundamental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Daily and JPMorgan Fundamental
The main advantage of trading using opposite Direxion Daily and JPMorgan Fundamental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, JPMorgan Fundamental 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 JPMorgan Fundamental will offset losses from the drop in JPMorgan Fundamental's long position.| Direxion Daily vs. Direxion Daily SP | Direxion Daily vs. Direxion Daily Semiconductor | Direxion Daily vs. Direxion Daily Technology | Direxion Daily vs. Direxion Daily Small |
| JPMorgan Fundamental vs. Vanguard Mid Cap Index | JPMorgan Fundamental vs. SPDR SP 400 | JPMorgan Fundamental vs. SPDR SP 400 | JPMorgan Fundamental vs. Direxion Daily Mid |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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