Correlation Between Direxion Daily and GLCN
Can any of the company-specific risk be diversified away by investing in both Direxion Daily and GLCN 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 GLCN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Direxion Daily SP500 and GLCN, you can compare the effects of market volatilities on Direxion Daily and GLCN 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 GLCN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and GLCN.
Diversification Opportunities for Direxion Daily and GLCN
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Direxion and GLCN is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily SP500 and GLCN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GLCN 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 SP500 are associated (or correlated) with GLCN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GLCN has no effect on the direction of Direxion Daily i.e., Direxion Daily and GLCN go up and down completely randomly.
Pair Corralation between Direxion Daily and GLCN
If you would invest 17,711 in Direxion Daily SP500 on October 23, 2024 and sell it today you would earn a total of 473.00 from holding Direxion Daily SP500 or generate 2.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 5.26% |
| Values | Daily Returns |
Direxion Daily SP500 vs. GLCN
Performance |
| Timeline |
| Direxion Daily SP500 |
| GLCN |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Direxion Daily and GLCN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Daily and GLCN
The main advantage of trading using opposite Direxion Daily and GLCN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, GLCN 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 GLCN will offset losses from the drop in GLCN's long position.| Direxion Daily vs. Direxion Daily SP | Direxion Daily vs. Direxion Daily Technology | Direxion Daily vs. Direxion Daily Small | Direxion Daily vs. Direxion Daily Semiconductor |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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