Correlation Between PGIM Ultra and Direxion Daily
Can any of the company-specific risk be diversified away by investing in both PGIM Ultra 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 PGIM Ultra and Direxion Daily into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PGIM Ultra Short and Direxion Daily Real, you can compare the effects of market volatilities on PGIM Ultra 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 PGIM Ultra with a short position of Direxion Daily. Check out your portfolio center. Please also check ongoing floating volatility patterns of PGIM Ultra and Direxion Daily.
Diversification Opportunities for PGIM Ultra and Direxion Daily
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PGIM and Direxion is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding PGIM Ultra Short and Direxion Daily Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direxion Daily Real and PGIM Ultra 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 PGIM Ultra Short 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 Real has no effect on the direction of PGIM Ultra i.e., PGIM Ultra and Direxion Daily go up and down completely randomly.
Pair Corralation between PGIM Ultra and Direxion Daily
Given the investment horizon of 90 days PGIM Ultra Short is expected to generate 0.01 times more return on investment than Direxion Daily. However, PGIM Ultra Short is 134.12 times less risky than Direxion Daily. It trades about 0.8 of its potential returns per unit of risk. Direxion Daily Real is currently generating about -0.09 per unit of risk. If you would invest 4,905 in PGIM Ultra Short on October 22, 2024 and sell it today you would earn a total of 62.00 from holding PGIM Ultra Short or generate 1.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PGIM Ultra Short vs. Direxion Daily Real
Performance |
| Timeline |
| PGIM Ultra Short |
| Direxion Daily Real |
PGIM Ultra and Direxion Daily Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PGIM Ultra and Direxion Daily
The main advantage of trading using opposite PGIM Ultra and Direxion Daily positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PGIM Ultra 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.| PGIM Ultra vs. Janus Henderson Short | PGIM Ultra vs. iShares Ultra Short Term | PGIM Ultra vs. SPDR Bloomberg Investment | PGIM Ultra vs. Invesco Ultra Short |
| Direxion Daily vs. Direxion Daily Real | Direxion Daily vs. Direxion Daily MSCI | Direxion Daily vs. Direxion Daily Retail | Direxion Daily vs. Direxion Daily Healthcare |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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