Correlation Between Direxion Daily and DGAZ
Can any of the company-specific risk be diversified away by investing in both Direxion Daily and DGAZ 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 DGAZ 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 DGAZ, you can compare the effects of market volatilities on Direxion Daily and DGAZ 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 DGAZ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and DGAZ.
Diversification Opportunities for Direxion Daily and DGAZ
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Direxion and DGAZ is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Technology and DGAZ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DGAZ 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 DGAZ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DGAZ has no effect on the direction of Direxion Daily i.e., Direxion Daily and DGAZ go up and down completely randomly.
Pair Corralation between Direxion Daily and DGAZ
If you would invest (100.00) in DGAZ on January 26, 2024 and sell it today you would earn a total of 100.00 from holding DGAZ or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Direxion Daily Technology vs. DGAZ
Performance |
| Timeline |
| Direxion Daily Technology |
| DGAZ |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Direxion Daily and DGAZ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Daily and DGAZ
The main advantage of trading using opposite Direxion Daily and DGAZ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, DGAZ 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 DGAZ will offset losses from the drop in DGAZ's long position.| Direxion Daily vs. Direxion Daily Semiconductor | Direxion Daily vs. Direxion Daily SP500 | Direxion Daily vs. Direxion Daily Technology | Direxion Daily vs. Direxion Daily SP |
| DGAZ vs. ProShares Ultra Bloomberg | DGAZ vs. Direxion Daily Semiconductor | DGAZ vs. MicroSectors Big Oil | DGAZ vs. Direxion Daily SP |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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