diversifiable risk of combining Direxion Daily and Direxion Daily into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Direxion Daily Industrials and Direxion Daily Regional, you can compare the effects of market volatilities on Direxion Daily and Direxion Daily 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 Direxion Daily. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and Direxion Daily.
Diversification Opportunities for Direxion Daily and Direxion Daily
Pair Corralation between Direxion Daily and Direxion Daily
Given the investment horizon of 90 days Direxion Daily Industrials is expected to generate 0.38 times more return on investment than Direxion Daily. However, Direxion Daily Industrials is 2.65 times less risky than Direxion Daily. It trades about 0.23 of its potential returns per unit of risk. Direxion Daily Regional is currently generating about -0.16 per unit of risk. If you would invest 4,186 in Direxion Daily Industrials on November 24, 2023 and sell it today you would earn a total of 501.00 from holding Direxion Daily Industrials or generate 11.97% return on investment over 90 days.
Direxion Daily Industrials vs. Direxion Daily Regional
Direxion Daily and Direxion Daily Volatility Contrast
Pair Trading with Direxion Daily and Direxion DailyThe main advantage of trading using opposite Direxion Daily and Direxion Daily positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, Direxion Daily 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 Direxion Daily will offset losses from the drop in Direxion Daily's long position. The idea behind Direxion Daily Industrials and Direxion Daily Regional pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
|Top Crypto Exchanges
Search and analyze digital assets across top global cryptocurrency exchanges
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Track or share privately all of your investments from the convenience of any device
Analyst recommendations and target price estimates broken down by several categories
Portfolio analysis module that provides access to portfolio diagnostics and optimization engine