Correlation Between Direxion Daily and Ushio
Can any of the company-specific risk be diversified away by investing in both Direxion Daily and Ushio 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 Ushio 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 Ushio Inc, you can compare the effects of market volatilities on Direxion Daily and Ushio 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 Ushio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and Ushio.
Diversification Opportunities for Direxion Daily and Ushio
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Direxion and Ushio is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Mid and Ushio Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ushio Inc 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 Ushio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ushio Inc has no effect on the direction of Direxion Daily i.e., Direxion Daily and Ushio go up and down completely randomly.
Pair Corralation between Direxion Daily and Ushio
Given the investment horizon of 90 days Direxion Daily Mid is expected to generate 8.88 times more return on investment than Ushio. However, Direxion Daily is 8.88 times more volatile than Ushio Inc. It trades about 0.28 of its potential returns per unit of risk. Ushio Inc is currently generating about -0.19 per unit of risk. If you would invest 5,385 in Direxion Daily Mid on September 5, 2024 and sell it today you would earn a total of 1,235 from holding Direxion Daily Mid or generate 22.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Direxion Daily Mid vs. Ushio Inc
Performance |
| Timeline |
| Direxion Daily Mid |
| Ushio Inc |
Direxion Daily and Ushio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Daily and Ushio
The main advantage of trading using opposite Direxion Daily and Ushio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, Ushio 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 Ushio will offset losses from the drop in Ushio'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 |
| Ushio vs. Dear Cashmere Holding | Ushio vs. Goff Corp | Ushio vs. Wialan Technologies | Ushio vs. Cgrowth Capital |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| 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 |