Correlation Between AXS 2X and Direxion Daily
Can any of the company-specific risk be diversified away by investing in both AXS 2X 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 AXS 2X and Direxion Daily 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 Direxion Daily Semiconductor, you can compare the effects of market volatilities on AXS 2X 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 AXS 2X with a short position of Direxion Daily. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXS 2X and Direxion Daily.
Diversification Opportunities for AXS 2X and Direxion Daily
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AXS and Direxion is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding AXS 2X Innovation and Direxion Daily Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direxion Daily Semic 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 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 Semic has no effect on the direction of AXS 2X i.e., AXS 2X and Direxion Daily go up and down completely randomly.
Pair Corralation between AXS 2X and Direxion Daily
Given the investment horizon of 90 days AXS 2X Innovation is expected to generate 1.51 times more return on investment than Direxion Daily. However, AXS 2X is 1.51 times more volatile than Direxion Daily Semiconductor. It trades about 0.01 of its potential returns per unit of risk. Direxion Daily Semiconductor is currently generating about -0.02 per unit of risk. If you would invest 6,613 in AXS 2X Innovation on October 26, 2024 and sell it today you would lose (1,371) from holding AXS 2X Innovation or give up 20.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AXS 2X Innovation vs. Direxion Daily Semiconductor
Performance |
| Timeline |
| AXS 2X Innovation |
| Direxion Daily Semic |
AXS 2X and Direxion Daily Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AXS 2X and Direxion Daily
The main advantage of trading using opposite AXS 2X and Direxion Daily positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXS 2X 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.| AXS 2X vs. Tuttle Capital Short | AXS 2X vs. Direxion Shares ETF | AXS 2X vs. AXS TSLA Bear | AXS 2X vs. 2x Long VIX |
| Direxion Daily vs. Direxion Daily Semiconductor | Direxion Daily vs. Direxion Daily SP | Direxion Daily vs. Direxion Daily Technology | Direxion Daily vs. Direxion Daily SP |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |