Correlation Between Direxion Daily and SAF Holland
Can any of the company-specific risk be diversified away by investing in both Direxion Daily and SAF Holland 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 SAF Holland 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 SAF Holland SA, you can compare the effects of market volatilities on Direxion Daily and SAF Holland 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 SAF Holland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and SAF Holland.
Diversification Opportunities for Direxion Daily and SAF Holland
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Direxion and SAF is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Mid and SAF Holland SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAF Holland SA 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 SAF Holland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAF Holland SA has no effect on the direction of Direxion Daily i.e., Direxion Daily and SAF Holland go up and down completely randomly.
Pair Corralation between Direxion Daily and SAF Holland
Given the investment horizon of 90 days Direxion Daily Mid is expected to under-perform the SAF Holland. But the etf apears to be less risky and, when comparing its historical volatility, Direxion Daily Mid is 1.09 times less risky than SAF Holland. The etf trades about -0.07 of its potential returns per unit of risk. The SAF Holland SA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,484 in SAF Holland SA on September 12, 2024 and sell it today you would lose (4.00) from holding SAF Holland SA or give up 0.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Direxion Daily Mid vs. SAF Holland SA
Performance |
| Timeline |
| Direxion Daily Mid |
| SAF Holland SA |
Direxion Daily and SAF Holland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Daily and SAF Holland
The main advantage of trading using opposite Direxion Daily and SAF Holland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, SAF Holland 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 SAF Holland will offset losses from the drop in SAF Holland'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 |
| SAF Holland vs. SALESFORCE INC CDR | SAF Holland vs. Carsales | SAF Holland vs. Dairy Farm International | SAF Holland vs. CANON MARKETING JP |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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