Correlation Between Direxion Daily and Shui On
Can any of the company-specific risk be diversified away by investing in both Direxion Daily and Shui On 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 Shui On 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 Shui On Land, you can compare the effects of market volatilities on Direxion Daily and Shui On 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 Shui On. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and Shui On.
Diversification Opportunities for Direxion Daily and Shui On
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Direxion and Shui is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Mid and Shui On Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shui On Land 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 Shui On. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shui On Land has no effect on the direction of Direxion Daily i.e., Direxion Daily and Shui On go up and down completely randomly.
Pair Corralation between Direxion Daily and Shui On
Given the investment horizon of 90 days Direxion Daily Mid is expected to generate 0.1 times more return on investment than Shui On. However, Direxion Daily Mid is 9.71 times less risky than Shui On. It trades about 0.09 of its potential returns per unit of risk. Shui On Land is currently generating about -0.07 per unit of risk. If you would invest 3,315 in Direxion Daily Mid on September 4, 2024 and sell it today you would earn a total of 3,417 from holding Direxion Daily Mid or generate 103.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 3.11% |
| Values | Daily Returns |
Direxion Daily Mid vs. Shui On Land
Performance |
| Timeline |
| Direxion Daily Mid |
| Shui On Land |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Direxion Daily and Shui On Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Daily and Shui On
The main advantage of trading using opposite Direxion Daily and Shui On positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, Shui On 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 Shui On will offset losses from the drop in Shui On'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 |
| Shui On vs. Sensient Technologies | Shui On vs. MGIC Investment Corp | Shui On vs. CapitaLand Investment Limited | Shui On vs. Guangdong Investment Limited |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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