Correlation Between Direxion Daily and Natixis Investment
Can any of the company-specific risk be diversified away by investing in both Direxion Daily and Natixis Investment 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 Natixis Investment 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 Natixis Investment Managers, you can compare the effects of market volatilities on Direxion Daily and Natixis Investment 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 Natixis Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and Natixis Investment.
Diversification Opportunities for Direxion Daily and Natixis Investment
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Direxion and Natixis is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily NVDA and Natixis Investment Managers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natixis Investment 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 Natixis Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natixis Investment has no effect on the direction of Direxion Daily i.e., Direxion Daily and Natixis Investment go up and down completely randomly.
Pair Corralation between Direxion Daily and Natixis Investment
Given the investment horizon of 90 days Direxion Daily NVDA is expected to generate 52.25 times more return on investment than Natixis Investment. However, Direxion Daily is 52.25 times more volatile than Natixis Investment Managers. It trades about 0.05 of its potential returns per unit of risk. Natixis Investment Managers is currently generating about 0.3 per unit of risk. If you would invest 9,810 in Direxion Daily NVDA on September 1, 2024 and sell it today you would earn a total of 1,803 from holding Direxion Daily NVDA or generate 18.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 64.29% |
| Values | Daily Returns |
Direxion Daily NVDA vs. Natixis Investment Managers
Performance |
| Timeline |
| Direxion Daily NVDA |
| Natixis Investment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Direxion Daily and Natixis Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Daily and Natixis Investment
The main advantage of trading using opposite Direxion Daily and Natixis Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, Natixis Investment 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 Natixis Investment will offset losses from the drop in Natixis Investment's long position.| Direxion Daily vs. Tidal Trust II | Direxion Daily vs. Tidal Trust II | Direxion Daily vs. Direxion Daily META | Direxion Daily vs. Direxion Daily META |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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