Correlation Between NYSE Composite and Direxion
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Direxion 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 NYSE Composite and Direxion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Direxion, you can compare the effects of market volatilities on NYSE Composite and Direxion 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 NYSE Composite with a short position of Direxion. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Direxion.
Diversification Opportunities for NYSE Composite and Direxion
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NYSE and Direxion is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Direxion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direxion and NYSE Composite 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 NYSE Composite are associated (or correlated) with Direxion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direxion has no effect on the direction of NYSE Composite i.e., NYSE Composite and Direxion go up and down completely randomly.
Pair Corralation between NYSE Composite and Direxion
If you would invest 1,925,354 in NYSE Composite on September 2, 2024 and sell it today you would earn a total of 101,850 from holding NYSE Composite or generate 5.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
NYSE Composite vs. Direxion
Performance |
| Timeline |
NYSE Composite and Direxion Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Direxion
Pair trading matchups for Direxion
Pair Trading with NYSE Composite and Direxion
The main advantage of trading using opposite NYSE Composite and Direxion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Direxion 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 will offset losses from the drop in Direxion's long position.| NYSE Composite vs. Simon Property Group | NYSE Composite vs. Merit Medical Systems | NYSE Composite vs. Catalent | NYSE Composite vs. Titan Machinery |
| Direxion vs. Humana Inc | Direxion vs. Xtrackers California Municipal | Direxion vs. JPMorgan Active Value | Direxion vs. Formidable Fortress ETF |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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