Correlation Between Direxion Daily and ZKB Silver
Can any of the company-specific risk be diversified away by investing in both Direxion Daily and ZKB Silver 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 ZKB Silver 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 ZKB Silver ETF, you can compare the effects of market volatilities on Direxion Daily and ZKB Silver 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 ZKB Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and ZKB Silver.
Diversification Opportunities for Direxion Daily and ZKB Silver
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Direxion and ZKB is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Mid and ZKB Silver ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZKB Silver ETF 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 ZKB Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZKB Silver ETF has no effect on the direction of Direxion Daily i.e., Direxion Daily and ZKB Silver go up and down completely randomly.
Pair Corralation between Direxion Daily and ZKB Silver
Given the investment horizon of 90 days Direxion Daily Mid is expected to generate 1.57 times more return on investment than ZKB Silver. However, Direxion Daily is 1.57 times more volatile than ZKB Silver ETF. It trades about 0.09 of its potential returns per unit of risk. ZKB Silver ETF is currently generating about 0.06 per unit of risk. If you would invest 3,822 in Direxion Daily Mid on September 5, 2024 and sell it today you would earn a total of 2,840 from holding Direxion Daily Mid or generate 74.31% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Direxion Daily Mid vs. ZKB Silver ETF
Performance |
Timeline |
Direxion Daily Mid |
ZKB Silver ETF |
Direxion Daily and ZKB Silver Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Direxion Daily and ZKB Silver
The main advantage of trading using opposite Direxion Daily and ZKB Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, ZKB Silver 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 ZKB Silver will offset losses from the drop in ZKB Silver'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 |
ZKB Silver vs. Vanguard SP 500 | ZKB Silver vs. iShares Core SP | ZKB Silver vs. Lyxor Japan UCITS | ZKB Silver vs. iShares SP 500 |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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