Correlation Between Direxion and United States
Can any of the company-specific risk be diversified away by investing in both Direxion and United States 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 and United States into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Direxion and United States Oil, you can compare the effects of market volatilities on Direxion and United States 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 with a short position of United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion and United States.
Diversification Opportunities for Direxion and United States
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Direxion and United is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Direxion and United States Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Oil and Direxion 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 are associated (or correlated) with United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Oil has no effect on the direction of Direxion i.e., Direxion and United States go up and down completely randomly.
Pair Corralation between Direxion and United States
If you would invest 7,729 in United States Oil on January 26, 2024 and sell it today you would earn a total of 235.00 from holding United States Oil or generate 3.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Direxion vs. United States Oil
Performance |
| Timeline |
| Direxion |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| United States Oil |
Direxion and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion and United States
The main advantage of trading using opposite Direxion and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.| Direxion vs. Direxion Daily MSCI | Direxion vs. Direxion Daily Regional | Direxion vs. Direxion Daily Industrials | Direxion vs. Direxion Daily Gold |
| United States vs. HUMANA INC | United States vs. Aquagold International | United States vs. Barloworld Ltd ADR | United States vs. Morningstar Unconstrained Allocation |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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