Correlation Between Direxion Daily and PTT OIL
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 Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 95.24% |
Values | Daily Returns |
Direxion Daily Mid vs. PTT OIL RETAIL
Performance |
Timeline |
Direxion Daily Mid |
PTT OIL RETAIL |
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.Direxion Daily vs. Direxion Daily Retail | Direxion Daily vs. Direxion Daily Industrials | Direxion Daily vs. Direxion Daily Transportation | Direxion Daily vs. Direxion Daily FTSE |
PTT OIL vs. PTT Oil and | PTT OIL vs. Thai Oil Public | PTT OIL vs. IRPC Public | PTT OIL vs. Star Petroleum Refining |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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