Correlation Between Direxion Daily and Elbit Imaging
Can any of the company-specific risk be diversified away by investing in both Direxion Daily and Elbit Imaging 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 Elbit Imaging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Direxion Daily FTSE and Elbit Imaging, you can compare the effects of market volatilities on Direxion Daily and Elbit Imaging 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 Elbit Imaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and Elbit Imaging.
Diversification Opportunities for Direxion Daily and Elbit Imaging
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Direxion and Elbit is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily FTSE and Elbit Imaging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elbit Imaging 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 FTSE are associated (or correlated) with Elbit Imaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elbit Imaging has no effect on the direction of Direxion Daily i.e., Direxion Daily and Elbit Imaging go up and down completely randomly.
Pair Corralation between Direxion Daily and Elbit Imaging
Given the investment horizon of 90 days Direxion Daily FTSE is expected to under-perform the Elbit Imaging. But the etf apears to be less risky and, when comparing its historical volatility, Direxion Daily FTSE is 1.21 times less risky than Elbit Imaging. The etf trades about -0.33 of its potential returns per unit of risk. The Elbit Imaging is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 37,300 in Elbit Imaging on January 20, 2024 and sell it today you would lose (2,000) from holding Elbit Imaging or give up 5.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 86.36% |
| Values | Daily Returns |
Direxion Daily FTSE vs. Elbit Imaging
Performance |
| Timeline |
| Direxion Daily FTSE |
| Elbit Imaging |
Direxion Daily and Elbit Imaging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Daily and Elbit Imaging
The main advantage of trading using opposite Direxion Daily and Elbit Imaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, Elbit Imaging 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 Elbit Imaging will offset losses from the drop in Elbit Imaging's long position.| Direxion Daily vs. Direxion Daily South | Direxion Daily vs. Direxion Daily Mid | Direxion Daily vs. Direxion Daily MSCI | Direxion Daily vs. Direxion Daily MSCI |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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