Correlation Between Direxion Daily and ATA Creativity
Can any of the company-specific risk be diversified away by investing in both Direxion Daily and ATA Creativity 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 ATA Creativity 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 ATA Creativity Global, you can compare the effects of market volatilities on Direxion Daily and ATA Creativity 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 ATA Creativity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and ATA Creativity.
Diversification Opportunities for Direxion Daily and ATA Creativity
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Direxion and ATA is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Mid and ATA Creativity Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATA Creativity Global 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 ATA Creativity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATA Creativity Global has no effect on the direction of Direxion Daily i.e., Direxion Daily and ATA Creativity go up and down completely randomly.
Pair Corralation between Direxion Daily and ATA Creativity
Given the investment horizon of 90 days Direxion Daily Mid is expected to under-perform the ATA Creativity. But the etf apears to be less risky and, when comparing its historical volatility, Direxion Daily Mid is 2.01 times less risky than ATA Creativity. The etf trades about -0.25 of its potential returns per unit of risk. The ATA Creativity Global is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 79.00 in ATA Creativity Global on December 2, 2024 and sell it today you would earn a total of 4.00 from holding ATA Creativity Global or generate 5.06% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Direxion Daily Mid vs. ATA Creativity Global
Performance |
Timeline |
Direxion Daily Mid |
ATA Creativity Global |
Direxion Daily and ATA Creativity Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Direxion Daily and ATA Creativity
The main advantage of trading using opposite Direxion Daily and ATA Creativity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, ATA Creativity 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 ATA Creativity will offset losses from the drop in ATA Creativity'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 |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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