Correlation Between Direxion Shares and USCF Gold
Can any of the company-specific risk be diversified away by investing in both Direxion Shares and USCF Gold 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 USCF Gold 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 USCF Gold Strategy, you can compare the effects of market volatilities on Direxion Shares and USCF Gold 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 USCF Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Shares and USCF Gold.
Diversification Opportunities for Direxion Shares and USCF Gold
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Direxion and USCF is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Shares ETF and USCF Gold Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USCF Gold Strategy 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 USCF Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USCF Gold Strategy has no effect on the direction of Direxion Shares i.e., Direxion Shares and USCF Gold go up and down completely randomly.
Pair Corralation between Direxion Shares and USCF Gold
Given the investment horizon of 90 days Direxion Shares ETF is expected to generate 9.25 times more return on investment than USCF Gold. However, Direxion Shares is 9.25 times more volatile than USCF Gold Strategy. It trades about 0.07 of its potential returns per unit of risk. USCF Gold Strategy is currently generating about 0.13 per unit of risk. If you would invest 1,476 in Direxion Shares ETF on September 14, 2024 and sell it today you would earn a total of 1,586 from holding Direxion Shares ETF or generate 107.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Direxion Shares ETF vs. USCF Gold Strategy
Performance |
| Timeline |
| Direxion Shares ETF |
| USCF Gold Strategy |
Direxion Shares and USCF Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Shares and USCF Gold
The main advantage of trading using opposite Direxion Shares and USCF Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Shares position performs unexpectedly, USCF Gold 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 USCF Gold will offset losses from the drop in USCF Gold'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 |
| USCF Gold vs. MicroSectors Gold 3X | USCF Gold vs. Franklin Responsibly Sourced | USCF Gold vs. GraniteShares Gold Trust | USCF Gold vs. DB Gold Double |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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