Correlation Between AXS 2X and Dow Jones
Can any of the company-specific risk be diversified away by investing in both AXS 2X and Dow Jones 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 AXS 2X and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AXS 2X Innovation and Dow Jones Industrial, you can compare the effects of market volatilities on AXS 2X and Dow Jones 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 AXS 2X with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXS 2X and Dow Jones.
Diversification Opportunities for AXS 2X and Dow Jones
Very poor diversification
The 3 months correlation between AXS and Dow is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding AXS 2X Innovation and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and AXS 2X 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 AXS 2X Innovation are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of AXS 2X i.e., AXS 2X and Dow Jones go up and down completely randomly.
Pair Corralation between AXS 2X and Dow Jones
Given the investment horizon of 90 days AXS 2X is expected to generate 1.57 times less return on investment than Dow Jones. In addition to that, AXS 2X is 6.27 times more volatile than Dow Jones Industrial. It trades about 0.01 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.1 per unit of volatility. If you would invest 3,771,010 in Dow Jones Industrial on August 24, 2024 and sell it today you would earn a total of 658,641 from holding Dow Jones Industrial or generate 17.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AXS 2X Innovation vs. Dow Jones Industrial
Performance |
| Timeline |
AXS 2X and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
AXS 2X Innovation
Pair trading matchups for AXS 2X
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with AXS 2X and Dow Jones
The main advantage of trading using opposite AXS 2X and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXS 2X position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| AXS 2X vs. Direxion Daily SP | AXS 2X vs. Direxion Daily Semiconductor | AXS 2X vs. Direxion Daily Technology | AXS 2X vs. Direxion Daily Small |
| Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. Perseus Mining Limited | Dow Jones vs. Titan Machinery | Dow Jones vs. Simon Property Group |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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