Correlation Between T Rex and Direxion Daily
Can any of the company-specific risk be diversified away by investing in both T Rex and Direxion Daily 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 T Rex and Direxion Daily into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between T Rex 2X Long and Direxion Daily NVDA, you can compare the effects of market volatilities on T Rex and Direxion Daily 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 T Rex with a short position of Direxion Daily. Check out your portfolio center. Please also check ongoing floating volatility patterns of T Rex and Direxion Daily.
Diversification Opportunities for T Rex and Direxion Daily
-0.99 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NVDX and Direxion is -0.99. Overlapping area represents the amount of risk that can be diversified away by holding T Rex 2X Long and Direxion Daily NVDA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direxion Daily NVDA and T Rex 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 T Rex 2X Long are associated (or correlated) with Direxion Daily. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direxion Daily NVDA has no effect on the direction of T Rex i.e., T Rex and Direxion Daily go up and down completely randomly.
Pair Corralation between T Rex and Direxion Daily
Given the investment horizon of 90 days T Rex 2X Long is expected to generate 2.0 times more return on investment than Direxion Daily. However, T Rex is 2.0 times more volatile than Direxion Daily NVDA. It trades about 0.14 of its potential returns per unit of risk. Direxion Daily NVDA is currently generating about -0.13 per unit of risk. If you would invest 289.00 in T Rex 2X Long on September 1, 2024 and sell it today you would earn a total of 1,453 from holding T Rex 2X Long or generate 502.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.63% |
| Values | Daily Returns |
T Rex 2X Long vs. Direxion Daily NVDA
Performance |
| Timeline |
| T Rex 2X |
| Direxion Daily NVDA |
T Rex and Direxion Daily Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with T Rex and Direxion Daily
The main advantage of trading using opposite T Rex and Direxion Daily positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T Rex position performs unexpectedly, Direxion Daily 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 Direxion Daily will offset losses from the drop in Direxion Daily's long position.| T Rex vs. Tidal Trust II | T Rex vs. Tidal Trust II | T Rex vs. Direxion Daily META | T Rex vs. Direxion Daily META |
| 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |