Correlation Between Direxion Daily and Hainan Airlines
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By analyzing existing cross correlation between Direxion Daily Mid and Hainan Airlines Co, you can compare the effects of market volatilities on Direxion Daily and Hainan Airlines 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 Hainan Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and Hainan Airlines.
Diversification Opportunities for Direxion Daily and Hainan Airlines
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Direxion and Hainan is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Mid and Hainan Airlines Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hainan Airlines 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 Hainan Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hainan Airlines has no effect on the direction of Direxion Daily i.e., Direxion Daily and Hainan Airlines go up and down completely randomly.
Pair Corralation between Direxion Daily and Hainan Airlines
Given the investment horizon of 90 days Direxion Daily Mid is expected to under-perform the Hainan Airlines. In addition to that, Direxion Daily is 1.26 times more volatile than Hainan Airlines Co. It trades about -0.15 of its total potential returns per unit of risk. Hainan Airlines Co is currently generating about -0.16 per unit of volatility. If you would invest 191.00 in Hainan Airlines Co on December 2, 2024 and sell it today you would lose (37.00) from holding Hainan Airlines Co or give up 19.37% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 96.72% |
Values | Daily Returns |
Direxion Daily Mid vs. Hainan Airlines Co
Performance |
Timeline |
Direxion Daily Mid |
Hainan Airlines |
Direxion Daily and Hainan Airlines Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Direxion Daily and Hainan Airlines
The main advantage of trading using opposite Direxion Daily and Hainan Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, Hainan Airlines 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 Hainan Airlines will offset losses from the drop in Hainan Airlines' 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 |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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