Correlation Between Global X and Direxion Daily
Can any of the company-specific risk be diversified away by investing in both Global X and Direxion Daily 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 Global X and Direxion Daily into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X MLP and Direxion Daily SP, you can compare the effects of market volatilities on Global X and Direxion Daily 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 Global X with a short position of Direxion Daily. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Direxion Daily.
Diversification Opportunities for Global X and Direxion Daily
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Global and Direxion is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Global X MLP and Direxion Daily SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direxion Daily SP and Global X 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 Global X MLP are associated (or correlated) with Direxion Daily. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direxion Daily SP has no effect on the direction of Global X i.e., Global X and Direxion Daily go up and down completely randomly.
Pair Corralation between Global X and Direxion Daily
Given the investment horizon of 90 days Global X MLP is expected to generate 0.25 times more return on investment than Direxion Daily. However, Global X MLP is 3.93 times less risky than Direxion Daily. It trades about 0.12 of its potential returns per unit of risk. Direxion Daily SP is currently generating about -0.07 per unit of risk. If you would invest 4,701 in Global X MLP on September 12, 2024 and sell it today you would earn a total of 294.00 from holding Global X MLP or generate 6.25% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Global X MLP vs. Direxion Daily SP
Performance |
Timeline |
Global X MLP |
Direxion Daily SP |
Global X and Direxion Daily Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Global X and Direxion Daily
The main advantage of trading using opposite Global X and Direxion Daily positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Direxion Daily 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 Direxion Daily will offset losses from the drop in Direxion Daily's long position.Global X vs. First Trust North | Global X vs. Global X MLP | Global X vs. Tortoise North American | Global X vs. InfraCap MLP ETF |
Direxion Daily vs. Ultimus Managers Trust | Direxion Daily vs. EA Series Trust | Direxion Daily vs. Global X MLP | Direxion Daily vs. ETRACS Quarterly Pay |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
Commodity Directory Find actively traded commodities issued by global exchanges | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
CEOs Directory Screen CEOs from public companies around the world |