Correlation Between Direxion Daily and Southern California
Can any of the company-specific risk be diversified away by investing in both Direxion Daily and Southern California 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 Southern California 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 Southern California Gas, you can compare the effects of market volatilities on Direxion Daily and Southern California 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 Southern California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and Southern California.
Diversification Opportunities for Direxion Daily and Southern California
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Direxion and Southern is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Mid and Southern California Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern California Gas 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 Southern California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern California Gas has no effect on the direction of Direxion Daily i.e., Direxion Daily and Southern California go up and down completely randomly.
Pair Corralation between Direxion Daily and Southern California
Given the investment horizon of 90 days Direxion Daily Mid is expected to generate 0.91 times more return on investment than Southern California. However, Direxion Daily Mid is 1.1 times less risky than Southern California. It trades about 0.05 of its potential returns per unit of risk. Southern California Gas is currently generating about 0.02 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 Against |
| Strength | Insignificant |
| Accuracy | 89.49% |
| Values | Daily Returns |
Direxion Daily Mid vs. Southern California Gas
Performance |
| Timeline |
| Direxion Daily Mid |
| Southern California Gas |
Direxion Daily and Southern California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Daily and Southern California
The main advantage of trading using opposite Direxion Daily and Southern California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, Southern California 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 Southern California will offset losses from the drop in Southern California'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 |
| Southern California vs. Dynagas LNG Partners | Southern California vs. GasLog Partners LP | Southern California vs. GasLog Partners LP | Southern California vs. Genesis Energy LP |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Transaction History View history of all your transactions and understand their impact on performance |