Correlation Between Direxion Daily and US Global
Can any of the company-specific risk be diversified away by investing in both Direxion Daily and US Global 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 US Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Direxion Daily NVDA and US Global Jets, you can compare the effects of market volatilities on Direxion Daily and US Global 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 US Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and US Global.
Diversification Opportunities for Direxion Daily and US Global
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Direxion and JETS is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily NVDA and US Global Jets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Global Jets 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 NVDA are associated (or correlated) with US Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Global Jets has no effect on the direction of Direxion Daily i.e., Direxion Daily and US Global go up and down completely randomly.
Pair Corralation between Direxion Daily and US Global
Given the investment horizon of 90 days Direxion Daily NVDA is expected to generate 2.89 times more return on investment than US Global. However, Direxion Daily is 2.89 times more volatile than US Global Jets. It trades about 0.14 of its potential returns per unit of risk. US Global Jets is currently generating about 0.28 per unit of risk. If you would invest 9,699 in Direxion Daily NVDA on August 26, 2024 and sell it today you would earn a total of 2,581 from holding Direxion Daily NVDA or generate 26.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Direxion Daily NVDA vs. US Global Jets
Performance |
| Timeline |
| Direxion Daily NVDA |
| US Global Jets |
Direxion Daily and US Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Daily and US Global
The main advantage of trading using opposite Direxion Daily and US Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, US Global 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 US Global will offset losses from the drop in US Global's long position.| Direxion Daily vs. Tidal Trust II | Direxion Daily vs. Tidal Trust II | Direxion Daily vs. First Trust Dorsey | Direxion Daily vs. Direxion Daily META |
| US Global vs. Invesco Solar ETF | US Global vs. iShares Global Clean | US Global vs. iShares Semiconductor ETF | US Global vs. Amplify ETF Trust |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |