Correlation Between Direxion Work and ProShares Online

Can any of the company-specific risk be diversified away by investing in both Direxion Work and ProShares Online 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 Work and ProShares Online into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Direxion Work From and ProShares Online Retail, you can compare the effects of market volatilities on Direxion Work and ProShares Online 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 Work with a short position of ProShares Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Work and ProShares Online.

Diversification Opportunities for Direxion Work and ProShares Online

0.95

Correlation Coefficient

Direxion Work  ProShares Online

Almost no diversification

The 3 months correlation between Direxion and ProShares is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Work From and ProShares Online Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Online Retail and Direxion Work 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 Work From are associated (or correlated) with ProShares Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Online Retail has no effect on the direction of Direxion Work i.e., Direxion Work and ProShares Online go up and down completely randomly.

Pair Corralation between Direxion Work and ProShares Online

Considering the 90-day investment horizon Direxion Work From is expected to under-perform the ProShares Online. But the etf apears to be less risky and, when comparing its historical volatility, Direxion Work From is 1.05 times less risky than ProShares Online. The etf trades about -0.08 of its potential returns per unit of risk. The ProShares Online Retail is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  4,575  in ProShares Online Retail on December 21, 2024 and sell it today you would lose (191.00) from holding ProShares Online Retail or give up 4.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Direxion Work From  vs.  ProShares Online Retail

Direxion Work From

Risk-Adjusted Performance

Very Weak

Over the last 90 days Direxion Work From has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Etf's technical and fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the Etf traders.

ProShares Online Retail

Risk-Adjusted Performance

Very Weak

Over the last 90 days ProShares Online Retail has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, ProShares Online is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Direxion Work and ProShares Online

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

The idea behind Direxion Work From and ProShares Online 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.