Correlation Between Direxion Daily and ABIVAX Socit

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

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

Diversification Opportunities for Direxion Daily and ABIVAX Socit

-0.4

Correlation Coefficient

Direxion Daily  ABIVAX Socit

Very good diversification

The 3 months correlation between Direxion and ABIVAX is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Financial and ABIVAX Socit Anonyme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABIVAX Socit Anonyme 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 Financial are associated (or correlated) with ABIVAX Socit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABIVAX Socit Anonyme has no effect on the direction of Direxion Daily i.e., Direxion Daily and ABIVAX Socit go up and down completely randomly.

Pair Corralation between Direxion Daily and ABIVAX Socit

Considering the 90-day investment horizon Direxion Daily Financial is expected to generate 1.01 times more return on investment than ABIVAX Socit. However, Direxion Daily is 1.01 times more volatile than ABIVAX Socit Anonyme. It trades about 0.02 of its potential returns per unit of risk. ABIVAX Socit Anonyme is currently generating about -0.02 per unit of risk. If you would invest  15,007  in Direxion Daily Financial on December 29, 2024 and sell it today you would earn a total of  227.00  from holding Direxion Daily Financial or generate 1.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Direxion Daily Financial  vs.  ABIVAX Socit Anonyme

Direxion Daily Financial

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Direxion Daily Financial are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Direxion Daily is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

ABIVAX Socit Anonyme

Risk-Adjusted Performance

Very Weak

Over the last 90 days ABIVAX Socit Anonyme has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ABIVAX Socit is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Direxion Daily and ABIVAX Socit

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

The idea behind Direxion Daily Financial and ABIVAX Socit Anonyme 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.