Correlation Between Direxion Daily and WHA Public
Can any of the company-specific risk be diversified away by investing in both Direxion Daily and WHA Public 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 WHA Public 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 WHA Public, you can compare the effects of market volatilities on Direxion Daily and WHA Public 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 WHA Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and WHA Public.
Diversification Opportunities for Direxion Daily and WHA Public
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Direxion and WHA is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Mid and WHA Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WHA Public 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 WHA Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WHA Public has no effect on the direction of Direxion Daily i.e., Direxion Daily and WHA Public go up and down completely randomly.
Pair Corralation between Direxion Daily and WHA Public
Given the investment horizon of 90 days Direxion Daily is expected to generate 22.08 times less return on investment than WHA Public. But when comparing it to its historical volatility, Direxion Daily Mid is 20.59 times less risky than WHA Public. It trades about 0.05 of its potential returns per unit of risk. WHA Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 386.00 in WHA Public on September 12, 2024 and sell it today you would earn a total of 189.00 from holding WHA Public or generate 48.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.17% |
| Values | Daily Returns |
Direxion Daily Mid vs. WHA Public
Performance |
| Timeline |
| Direxion Daily Mid |
| WHA Public |
Direxion Daily and WHA Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Daily and WHA Public
The main advantage of trading using opposite Direxion Daily and WHA Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, WHA Public 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 WHA Public will offset losses from the drop in WHA Public'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 |
| WHA Public vs. WHA Public | WHA Public vs. Thai Union Group | WHA Public vs. Amata Public | WHA Public vs. The Siam Cement |
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.
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