Correlation Between Direxion Daily and Themes Silver
Can any of the company-specific risk be diversified away by investing in both Direxion Daily and Themes 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 Themes Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Direxion Daily Gold and Themes Silver Miners, you can compare the effects of market volatilities on Direxion Daily and Themes 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 Themes Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and Themes Silver.
Diversification Opportunities for Direxion Daily and Themes Silver
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Direxion and Themes is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Gold and Themes Silver Miners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Themes Silver Miners 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 Gold are associated (or correlated) with Themes Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Themes Silver Miners has no effect on the direction of Direxion Daily i.e., Direxion Daily and Themes Silver go up and down completely randomly.
Pair Corralation between Direxion Daily and Themes Silver
Given the investment horizon of 90 days Direxion Daily Gold is expected to generate 1.61 times more return on investment than Themes Silver. However, Direxion Daily is 1.61 times more volatile than Themes Silver Miners. It trades about 0.1 of its potential returns per unit of risk. Themes Silver Miners is currently generating about 0.04 per unit of risk. If you would invest 2,418 in Direxion Daily Gold on August 27, 2024 and sell it today you would earn a total of 2,053 from holding Direxion Daily Gold or generate 84.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 76.06% |
| Values | Daily Returns |
Direxion Daily Gold vs. Themes Silver Miners
Performance |
| Timeline |
| Direxion Daily Gold |
| Themes Silver Miners |
Direxion Daily and Themes Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Daily and Themes Silver
The main advantage of trading using opposite Direxion Daily and Themes Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, Themes 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 Themes Silver will offset losses from the drop in Themes Silver's long position.| Direxion Daily vs. Direxion Daily Gold | Direxion Daily vs. Direxion Daily Junior | Direxion Daily vs. Direxion Daily Junior | Direxion Daily vs. VanEck Gold Miners |
| Themes Silver vs. iShares Silver Trust | Themes Silver vs. SPDR Gold Shares | Themes Silver vs. Newmont Goldcorp Corp | Themes Silver vs. Direxion Daily Gold |
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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