Correlation Between Direxion Daily and AB Active
Can any of the company-specific risk be diversified away by investing in both Direxion Daily and AB Active 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 AB Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Direxion Daily Technology and AB Active ETFs,, you can compare the effects of market volatilities on Direxion Daily and AB Active 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 AB Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and AB Active.
Diversification Opportunities for Direxion Daily and AB Active
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Direxion and TAFL is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Technology and AB Active ETFs, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AB Active ETFs, 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 Technology are associated (or correlated) with AB Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AB Active ETFs, has no effect on the direction of Direxion Daily i.e., Direxion Daily and AB Active go up and down completely randomly.
Pair Corralation between Direxion Daily and AB Active
Given the investment horizon of 90 days Direxion Daily Technology is expected to generate 7.06 times more return on investment than AB Active. However, Direxion Daily is 7.06 times more volatile than AB Active ETFs,. It trades about 0.19 of its potential returns per unit of risk. AB Active ETFs, is currently generating about 0.17 per unit of risk. If you would invest 8,335 in Direxion Daily Technology on September 3, 2024 and sell it today you would earn a total of 1,016 from holding Direxion Daily Technology or generate 12.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Direxion Daily Technology vs. AB Active ETFs,
Performance |
| Timeline |
| Direxion Daily Technology |
| AB Active ETFs, |
Direxion Daily and AB Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Daily and AB Active
The main advantage of trading using opposite Direxion Daily and AB Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, AB Active 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 AB Active will offset losses from the drop in AB Active's long position.| Direxion Daily vs. ProShares Ultra SP500 | Direxion Daily vs. Direxion Daily SP500 | Direxion Daily vs. ProShares Ultra QQQ | Direxion Daily vs. Direxion Daily SP |
| AB Active vs. SSGA Active Trust | AB Active vs. SPDR Nuveen Municipal | AB Active vs. iShares Short Maturity | AB Active vs. First Trust Flexible |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Stocks Directory Find actively traded stocks across global markets | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |