Correlation Between Direxion Daily and DAX Midcap
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By analyzing existing cross correlation between Direxion Daily Mid and DAX Midcap, you can compare the effects of market volatilities on Direxion Daily and DAX Midcap 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 DAX Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and DAX Midcap.
Diversification Opportunities for Direxion Daily and DAX Midcap
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Direxion and DAX is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Mid and DAX Midcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAX Midcap 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 Mid are associated (or correlated) with DAX Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAX Midcap has no effect on the direction of Direxion Daily i.e., Direxion Daily and DAX Midcap go up and down completely randomly.
Pair Corralation between Direxion Daily and DAX Midcap
Given the investment horizon of 90 days Direxion Daily Mid is expected to generate 3.2 times more return on investment than DAX Midcap. However, Direxion Daily is 3.2 times more volatile than DAX Midcap. It trades about 0.22 of its potential returns per unit of risk. DAX Midcap is currently generating about 0.13 per unit of risk. If you would invest 4,627 in Direxion Daily Mid on September 6, 2024 and sell it today you would earn a total of 2,035 from holding Direxion Daily Mid or generate 43.98% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Direxion Daily Mid vs. DAX Midcap
Performance |
Timeline |
Direxion Daily and DAX Midcap Volatility Contrast
Predicted Return Density |
Returns |
Direxion Daily Mid
Pair trading matchups for Direxion Daily
DAX Midcap
Pair trading matchups for DAX Midcap
Pair Trading with Direxion Daily and DAX Midcap
The main advantage of trading using opposite Direxion Daily and DAX Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, DAX Midcap 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 DAX Midcap will offset losses from the drop in DAX Midcap's long position.Direxion Daily vs. Direxion Daily Retail | Direxion Daily vs. Direxion Daily Industrials | Direxion Daily vs. Direxion Daily Transportation | Direxion Daily vs. Direxion Daily FTSE |
DAX Midcap vs. Hyster Yale Materials Handling | DAX Midcap vs. Thai Beverage Public | DAX Midcap vs. Rayonier Advanced Materials | DAX Midcap vs. MOLSON RS BEVERAGE |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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