Correlation Between Direxion Shares and ClearBridge Sustainable
Can any of the company-specific risk be diversified away by investing in both Direxion Shares and ClearBridge Sustainable 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 Shares and ClearBridge Sustainable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Direxion Shares ETF and ClearBridge Sustainable Infrastructure, you can compare the effects of market volatilities on Direxion Shares and ClearBridge Sustainable 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 Shares with a short position of ClearBridge Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Shares and ClearBridge Sustainable.
Diversification Opportunities for Direxion Shares and ClearBridge Sustainable
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Direxion and ClearBridge is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Shares ETF and ClearBridge Sustainable Infras in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ClearBridge Sustainable and Direxion Shares 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 Shares ETF are associated (or correlated) with ClearBridge Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ClearBridge Sustainable has no effect on the direction of Direxion Shares i.e., Direxion Shares and ClearBridge Sustainable go up and down completely randomly.
Pair Corralation between Direxion Shares and ClearBridge Sustainable
Given the investment horizon of 90 days Direxion Shares ETF is expected to generate 8.23 times more return on investment than ClearBridge Sustainable. However, Direxion Shares is 8.23 times more volatile than ClearBridge Sustainable Infrastructure. It trades about 0.07 of its potential returns per unit of risk. ClearBridge Sustainable Infrastructure is currently generating about -0.01 per unit of risk. If you would invest 1,289 in Direxion Shares ETF on October 21, 2024 and sell it today you would earn a total of 1,702 from holding Direxion Shares ETF or generate 132.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Direxion Shares ETF vs. ClearBridge Sustainable Infras
Performance |
| Timeline |
| Direxion Shares ETF |
| ClearBridge Sustainable |
Direxion Shares and ClearBridge Sustainable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Shares and ClearBridge Sustainable
The main advantage of trading using opposite Direxion Shares and ClearBridge Sustainable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Shares position performs unexpectedly, ClearBridge Sustainable 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 ClearBridge Sustainable will offset losses from the drop in ClearBridge Sustainable's long position.| Direxion Shares vs. Direxion Shares ETF | Direxion Shares vs. Direxion Shares ETF | Direxion Shares vs. AXS TSLA Bear | Direxion Shares vs. Direxion Daily AMZN |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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