Correlation Between Direxion Daily and UBS
Can any of the company-specific risk be diversified away by investing in both Direxion Daily and UBS 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 UBS 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 UBS, you can compare the effects of market volatilities on Direxion Daily and UBS 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 UBS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and UBS.
Diversification Opportunities for Direxion Daily and UBS
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Direxion and UBS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Mid and UBS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS 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 UBS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS has no effect on the direction of Direxion Daily i.e., Direxion Daily and UBS go up and down completely randomly.
Pair Corralation between Direxion Daily and UBS
If you would invest 5,385 in Direxion Daily Mid on September 4, 2024 and sell it today you would earn a total of 1,347 from holding Direxion Daily Mid or generate 25.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Direxion Daily Mid vs. UBS
Performance |
| Timeline |
| Direxion Daily Mid |
| UBS |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Direxion Daily and UBS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Daily and UBS
The main advantage of trading using opposite Direxion Daily and UBS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, UBS 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 UBS will offset losses from the drop in UBS'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 |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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