Correlation Between Direxion Daily and PTT OIL

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

Diversification Opportunities for Direxion Daily and PTT OIL

-0.72
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Direxion and PTT is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Mid and PTT OIL RETAIL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTT OIL RETAIL 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 PTT OIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTT OIL RETAIL has no effect on the direction of Direxion Daily i.e., Direxion Daily and PTT OIL go up and down completely randomly.

Pair Corralation between Direxion Daily and PTT OIL

Given the investment horizon of 90 days Direxion Daily Mid is expected to generate 0.34 times more return on investment than PTT OIL. However, Direxion Daily Mid is 2.98 times less risky than PTT OIL. It trades about -0.01 of its potential returns per unit of risk. PTT OIL RETAIL is currently generating about -0.24 per unit of risk. If you would invest  6,333  in Direxion Daily Mid on September 13, 2024 and sell it today you would lose (65.00) from holding Direxion Daily Mid or give up 1.03% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy95.24%
ValuesDaily Returns

Direxion Daily Mid  vs.  PTT OIL RETAIL

 Performance 
       Timeline  
Direxion Daily Mid 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Direxion Daily Mid are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting fundamental indicators, Direxion Daily unveiled solid returns over the last few months and may actually be approaching a breakup point.
PTT OIL RETAIL 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days PTT OIL RETAIL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Direxion Daily and PTT OIL Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Direxion Daily and PTT OIL

The main advantage of trading using opposite Direxion Daily and PTT OIL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, PTT OIL 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 PTT OIL will offset losses from the drop in PTT OIL's long position.
The idea behind Direxion Daily Mid and PTT OIL RETAIL 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

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