Correlation Between Direxion Daily and Neovacs SA

Can any of the company-specific risk be diversified away by investing in both Direxion Daily and Neovacs SA 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 Neovacs SA 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 Neovacs SA, you can compare the effects of market volatilities on Direxion Daily and Neovacs SA 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 Neovacs SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and Neovacs SA.

Diversification Opportunities for Direxion Daily and Neovacs SA

0.23

Correlation Coefficient

Direxion Daily  Neovacs SA

Modest diversification

The 3 months correlation between Direxion and Neovacs is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Mid and Neovacs SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neovacs SA 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 Neovacs SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neovacs SA has no effect on the direction of Direxion Daily i.e., Direxion Daily and Neovacs SA go up and down completely randomly.

Pair Corralation between Direxion Daily and Neovacs SA

Given the investment horizon of 90 days Direxion Daily Mid is expected to generate 0.28 times more return on investment than Neovacs SA. However, Direxion Daily Mid is 3.51 times less risky than Neovacs SA. It trades about -0.1 of its potential returns per unit of risk. Neovacs SA is currently generating about -0.32 per unit of risk. If you would invest  5,228  in Direxion Daily Mid on December 30, 2024 and sell it today you would lose (1,124) from holding Direxion Daily Mid or give up 21.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.38%
Values	Daily Returns

Direxion Daily Mid  vs.  Neovacs SA

Direxion Daily Mid

Risk-Adjusted Performance

Very Weak

Over the last 90 days Direxion Daily Mid has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Etf's fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.

Neovacs SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Neovacs SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Direxion Daily and Neovacs SA

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

The idea behind Direxion Daily Mid and Neovacs SA 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 Commodity Directory module to find actively traded commodities issued by global exchanges.