Correlation Between Direxion Daily and Quantum FinTech

Can any of the company-specific risk be diversified away by investing in both Direxion Daily and Quantum FinTech 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 Quantum FinTech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Direxion Daily Mid and Quantum FinTech Acquisition, you can compare the effects of market volatilities on Direxion Daily and Quantum FinTech 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 Quantum FinTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and Quantum FinTech.

Diversification Opportunities for Direxion Daily and Quantum FinTech

0.67

Correlation Coefficient

Direxion Daily  Quantum FinTech

Poor diversification

The 3 months correlation between Direxion and Quantum is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Mid and Quantum FinTech Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quantum FinTech Acqu 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 Quantum FinTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quantum FinTech Acqu has no effect on the direction of Direxion Daily i.e., Direxion Daily and Quantum FinTech go up and down completely randomly.

Pair Corralation between Direxion Daily and Quantum FinTech

If you would invest  3,736  in Direxion Daily Mid on September 12, 2024 and sell it today you would earn a total of  2,532  from holding Direxion Daily Mid or generate 67.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	0.3%
Values	Daily Returns

Direxion Daily Mid  vs.  Quantum FinTech Acquisition

Direxion Daily Mid

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Direxion Daily Mid are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting fundamental indicators, Direxion Daily unveiled solid returns over the last few months and may actually be approaching a breakup point.

Quantum FinTech Acqu

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quantum FinTech Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Quantum FinTech is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Direxion Daily and Quantum FinTech

The main advantage of trading using opposite Direxion Daily and Quantum FinTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, Quantum FinTech 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 Quantum FinTech will offset losses from the drop in Quantum FinTech's long position.

The idea behind Direxion Daily Mid and Quantum FinTech Acquisition 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.

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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 Anywhere module to track or share privately all of your investments from the convenience of any device.