Direxion Daily Real Etf Volatility
Direxion Daily Real secures Sharpe Ratio (or Efficiency) of -0.0182, which denotes the etf had a -0.0182% return per unit of risk over the last 3 months. Direxion Daily Real exposes fifteen different technical indicators, which can help you to evaluate volatility embedded in its price movement. Please confirm Direxion Daily's Mean Deviation of 2.19, variance of 7.47, and Standard Deviation of 2.73 to check the risk estimate we provide.
Direxion |
Direxion Daily Etf volatility depicts how high the prices fluctuate around the mean (or its average) price. In other words, it is a statistical measure of the distribution of Direxion daily returns, and it is calculated using variance and standard deviation. We also use Direxion's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Direxion Daily volatility.
Direxion Daily Real Etf Volatility Analysis
Volatility refers to the frequency at which Direxion Daily etf price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with Direxion Daily's price changes. Investors will then calculate the volatility of Direxion Daily's etf to predict their future moves. A etf that has erratic price changes quickly hits new highs, and lows are considered highly volatile. A etf with relatively stable price changes has low volatility. A highly volatile etf is riskier, but the risk cuts both ways. Investing in highly volatile security can either be highly successful, or you may experience significant failure. There are two main types of Direxion Daily's volatility:
Historical Volatility
This type of etf volatility measures Direxion Daily's fluctuations based on previous trends. It's commonly used to predict Direxion Daily's future behavior based on its past. However, it cannot conclusively determine the future direction of the etf.Implied Volatility
This type of volatility provides a positive outlook on future price fluctuations for Direxion Daily's current market price. This means that the etf will return to its initially predicted market price. This type of volatility can be derived from derivative instruments written on Direxion Daily's to be redeemed at a future date.Transformation |
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Direxion Daily Projected Return Density Against Market
Considering the 90-day investment horizon Direxion Daily Real has a beta of -0.0827 suggesting as returns on the benchmark increase, returns on holding Direxion Daily are expected to decrease at a much lower rate. During a bear market, however, Direxion Daily Real is likely to outperform the market.Most traded equities are subject to two types of risk - systematic (i.e., market) and unsystematic (i.e., nonmarket or company-specific) risk. Unsystematic risk is the risk that events specific to Direxion Daily or Direxion Funds sector will adversely affect the stock's price. This type of risk can be diversified away by owning several different stocks in different industries whose stock prices have shown a small correlation to each other. On the other hand, systematic risk is the risk that Direxion Daily's price will be affected by overall etf market movements and cannot be diversified away. So, no matter how many positions you have, you cannot eliminate market risk. However, you can measure a Direxion etf's historical response to market movements and buy it if you are comfortable with its volatility direction. Beta and standard deviation are two commonly used measures to help you make the right decision.
Direxion Daily Real has a negative alpha, implying that the risk taken by holding this instrument is not justified. The company is significantly underperforming the Dow Jones Industrial. Predicted Return Density |
| Returns |
What Drives a Direxion Daily Price Volatility?
Several factors can influence a etf's market volatility:Industry
Specific events can influence volatility within a particular industry. For instance, a significant weather upheaval in a crucial oil-production site may cause oil prices to increase in the oil sector. The direct result will be the rise in the stock price of oil distribution companies. Similarly, any government regulation in a specific industry could negatively influence stock prices due to increased regulations on compliance that may impact the company's future earnings and growth.Political and Economic environment
When governments make significant decisions regarding trade agreements, policies, and legislation regarding specific industries, they will influence stock prices. Everything from speeches to elections may influence investors, who can directly influence the stock prices in any particular industry. The prevailing economic situation also plays a significant role in stock prices. When the economy is doing well, investors will have a positive reaction and hence, better stock prices and vice versa.The Company's Performance
Sometimes volatility will only affect an individual company. For example, a revolutionary product launch or strong earnings report may attract many investors to purchase the company. This positive attention will raise the company's stock price. In contrast, product recalls and data breaches may negatively influence a company's stock prices.Direxion Daily Etf Risk Measures
Considering the 90-day investment horizon the coefficient of variation of Direxion Daily is -5483.96. The daily returns are distributed with a variance of 7.47 and standard deviation of 2.73. The mean deviation of Direxion Daily Real is currently at 2.19. For similar time horizon, the selected benchmark (Dow Jones Industrial) has volatility of 0.77
α | Alpha over Dow Jones | -0.05 | |
β | Beta against Dow Jones | -0.08 | |
σ | Overall volatility | 2.73 | |
Ir | Information ratio | -0.07 |
Direxion Daily Etf Return Volatility
Direxion Daily historical daily return volatility represents how much of Direxion Daily etf's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The fund has volatility of 2.7326% on return distribution over 90 days investment horizon. By contrast, Dow Jones Industrial accepts 0.7685% volatility on return distribution over the 90 days horizon. Performance |
| Timeline |
About Direxion Daily Volatility
Volatility is a rate at which the price of Direxion Daily or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Direxion Daily may increase or decrease. In other words, similar to Direxion's beta indicator, it measures the risk of Direxion Daily and helps estimate the fluctuations that may happen in a short period of time. So if prices of Direxion Daily fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility.
Please read more on our technical analysis page.The fund invests in swap agreements, futures contracts, short positions or other financial instruments that, in combination, provide inverse or short leveraged exposure to the index equal to at least 80 percent of its net assets . Real Estate is traded on NYSEARCA Exchange in the United States.
Direxion Daily's stock volatility refers to the amount of uncertainty or risk involved with the size of changes in its stock's price. It is a statistical measure of the dispersion of returns on Direxion Etf over a specified period of time, often expressed as the standard deviation of daily returns. In other words, it measures how much Direxion Daily's price varies over time.
3 ways to utilize Direxion Daily's volatility to invest better
Higher Direxion Daily's etf volatility means that the price of its stock is changing rapidly and unpredictably, while lower stock volatility indicates that the price of Direxion Daily Real etf is relatively stable. Investors and traders use stock volatility as an indicator of risk and potential reward, as stocks with higher volatility can offer the potential for more significant returns but also come with a greater risk of losses. Direxion Daily Real etf volatility can provide helpful information for making investment decisions in the following ways:- Measuring Risk: Volatility can be used as a measure of risk, which can help you determine the potential fluctuations in the value of Direxion Daily Real investment. A higher volatility means higher risk and potentially larger changes in value.
- Identifying Opportunities: High volatility in Direxion Daily's etf can indicate that there is potential for significant price movements, either up or down, which could present investment opportunities.
- Diversification: Understanding how the volatility of Direxion Daily's etf relates to your other investments can help you create a well-diversified portfolio of assets with varying levels of risk.
Direxion Daily Investment Opportunity
Direxion Daily Real has a volatility of 2.73 and is 3.55 times more volatile than Dow Jones Industrial. Compared to the overall equity markets, volatility of historical daily returns of Direxion Daily Real is lower than 24 percent of all global equities and portfolios over the last 90 days. You can use Direxion Daily Real to protect your portfolios against small market fluctuations. The etf experiences a normal downward trend, but the immediate impact on correlations cannot be determined at the moment . Check odds of Direxion Daily to be traded at $0.0 in 90 days.Good diversification
The correlation between Direxion Daily Real and DJI is -0.02 (i.e., Good diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Real and DJI in the same portfolio, assuming nothing else is changed.
Direxion Daily Additional Risk Indicators
The analysis of Direxion Daily's secondary risk indicators is one of the essential steps in making a buy or sell decision. The process involves identifying the amount of risk involved in Direxion Daily's investment and either accepting that risk or mitigating it. Along with some common measures of Direxion Daily etf's risk such as standard deviation, beta, or value at risk, we also provide a set of secondary indicators that can assist in the individual investment decision or help in hedging the risk of your existing portfolios.
| Risk Adjusted Performance | (0.01) | |||
| Market Risk Adjusted Performance | 0.7334 | |||
| Mean Deviation | 2.19 | |||
| Coefficient Of Variation | (5,484) | |||
| Standard Deviation | 2.73 | |||
| Variance | 7.47 | |||
| Information Ratio | (0.07) |
Please note, the risk measures we provide can be used independently or collectively to perform a risk assessment. When comparing two potential etfs, we recommend comparing similar etfs with homogenous growth potential and valuation from related markets to determine which investment holds the most risk.
Direxion Daily Suggested Diversification Pairs
Pair trading is one of the very effective strategies used by professional day traders and hedge funds capitalizing on short-time and mid-term market inefficiencies. The approach is based on the fact that the ratio of prices of two correlating shares is long-term stable and oscillates around the average value. If the correlation ratio comes outside the common area, you can speculate with a high success rate that the ratio will return to the mean value and collect a profit.
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Direxion Daily as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Direxion Daily's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Direxion Daily's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Direxion Daily Real.
Check out Investing Opportunities to better understand how to build diversified portfolios. Also, note that the market value of any etf could be closely tied with the direction of predictive economic indicators such as signals in metropolitan statistical area. You can also try the Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Tools for Direxion Etf
When running Direxion Daily's price analysis, check to measure Direxion Daily's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Direxion Daily is operating at the current time. Most of Direxion Daily's value examination focuses on studying past and present price action to predict the probability of Direxion Daily's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Direxion Daily's price. Additionally, you may evaluate how the addition of Direxion Daily to your portfolios can decrease your overall portfolio volatility.
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