Correlation Between ANT and Direxion Shares

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

By analyzing existing cross correlation between ANT and Direxion Shares ETF, you can compare the effects of market volatilities on ANT and Direxion Shares 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 ANT with a short position of Direxion Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANT and Direxion Shares.

Diversification Opportunities for ANT and Direxion Shares

0.04

Correlation Coefficient

ANT  Direxion Shares

Significant diversification

The 3 months correlation between ANT and Direxion is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding ANT and Direxion Shares ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direxion Shares ETF and ANT 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 ANT are associated (or correlated) with Direxion Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direxion Shares ETF has no effect on the direction of ANT i.e., ANT and Direxion Shares go up and down completely randomly.

Pair Corralation between ANT and Direxion Shares

Assuming the 90 days trading horizon ANT is expected to generate 5.87 times more return on investment than Direxion Shares. However, ANT is 5.87 times more volatile than Direxion Shares ETF. It trades about 0.08 of its potential returns per unit of risk. Direxion Shares ETF is currently generating about -0.06 per unit of risk. If you would invest  147.00  in ANT on December 21, 2024 and sell it today you would earn a total of  0.00  from holding ANT or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

ANT  vs.  Direxion Shares ETF

ANT

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ANT are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, ANT exhibited solid returns over the last few months and may actually be approaching a breakup point.

Direxion Shares ETF

Risk-Adjusted Performance

Very Weak

Over the last 90 days Direxion Shares ETF has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Etf's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

Pair Trading with ANT and Direxion Shares

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

The idea behind ANT and Direxion Shares ETF 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.