Correlation Between Direxion Daily and Teucrium Soybean

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Direxion Daily and Teucrium Soybean 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 Teucrium Soybean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Direxion Daily Technology and Teucrium Soybean, you can compare the effects of market volatilities on Direxion Daily and Teucrium Soybean 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 Teucrium Soybean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and Teucrium Soybean.

Diversification Opportunities for Direxion Daily and Teucrium Soybean

-0.61
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Direxion and Teucrium is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Technology and Teucrium Soybean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teucrium Soybean 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 Technology are associated (or correlated) with Teucrium Soybean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teucrium Soybean has no effect on the direction of Direxion Daily i.e., Direxion Daily and Teucrium Soybean go up and down completely randomly.

Pair Corralation between Direxion Daily and Teucrium Soybean

Given the investment horizon of 90 days Direxion Daily Technology is expected to generate 4.17 times more return on investment than Teucrium Soybean. However, Direxion Daily is 4.17 times more volatile than Teucrium Soybean. It trades about 0.11 of its potential returns per unit of risk. Teucrium Soybean is currently generating about -0.09 per unit of risk. If you would invest  8,033  in Direxion Daily Technology on September 17, 2024 and sell it today you would earn a total of  1,897  from holding Direxion Daily Technology or generate 23.62% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Direxion Daily Technology  vs.  Teucrium Soybean

 Performance 
       Timeline  
Direxion Daily Technology 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Direxion Daily Technology are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental indicators, Direxion Daily disclosed solid returns over the last few months and may actually be approaching a breakup point.
Teucrium Soybean 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Teucrium Soybean has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Teucrium Soybean is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Direxion Daily and Teucrium Soybean Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Direxion Daily and Teucrium Soybean

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

Piotroski F Score
Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals
Portfolio Dashboard
Portfolio dashboard that provides centralized access to all your investments
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Investing Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.