Correlation Between Direxion Daily and USS Co
Can any of the company-specific risk be diversified away by investing in both Direxion Daily and USS Co 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 USS Co 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 USS Co Ltd, you can compare the effects of market volatilities on Direxion Daily and USS Co 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 USS Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and USS Co.
Diversification Opportunities for Direxion Daily and USS Co
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Direxion and USS is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Mid and USS Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USS Co 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 USS Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USS Co has no effect on the direction of Direxion Daily i.e., Direxion Daily and USS Co go up and down completely randomly.
Pair Corralation between Direxion Daily and USS Co
Given the investment horizon of 90 days Direxion Daily Mid is expected to generate 1.95 times more return on investment than USS Co. However, Direxion Daily is 1.95 times more volatile than USS Co Ltd. It trades about 0.05 of its potential returns per unit of risk. USS Co Ltd is currently generating about 0.04 per unit of risk. If you would invest 3,781 in Direxion Daily Mid on September 4, 2024 and sell it today you would earn a total of 2,839 from holding Direxion Daily Mid or generate 75.09% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 99.8% |
Values | Daily Returns |
Direxion Daily Mid vs. USS Co Ltd
Performance |
Timeline |
Direxion Daily Mid |
USS Co |
Direxion Daily and USS Co Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Direxion Daily and USS Co
The main advantage of trading using opposite Direxion Daily and USS Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, USS Co 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 USS Co will offset losses from the drop in USS Co'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 |
USS Co vs. Sonic Automotive | USS Co vs. Lithia Motors | USS Co vs. AutoNation | USS Co vs. Asbury Automotive Group |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |