Correlation Between IShares International and Direxion Auspice

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

By analyzing existing cross correlation between iShares International Treasury and Direxion Auspice Broad, you can compare the effects of market volatilities on IShares International and Direxion Auspice 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 IShares International with a short position of Direxion Auspice. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares International and Direxion Auspice.

Diversification Opportunities for IShares International and Direxion Auspice

0.0

Correlation Coefficient

IShares International  Direxion Auspice

Pay attention - limited upside

The 3 months correlation between IShares and Direxion is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding iShares International Treasury and Direxion Auspice Broad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direxion Auspice Broad and IShares International 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 iShares International Treasury are associated (or correlated) with Direxion Auspice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direxion Auspice Broad has no effect on the direction of IShares International i.e., IShares International and Direxion Auspice go up and down completely randomly.

Pair Corralation between IShares International and Direxion Auspice

If you would invest  0.00  in Direxion Auspice Broad on February 27, 2024 and sell it today you would earn a total of  0.00  from holding Direxion Auspice Broad or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

iShares International Treasury  vs.  Direxion Auspice Broad

iShares International

Risk-Adjusted Performance

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Very Weak

Over the last 90 days iShares International Treasury has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, IShares International is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Direxion Auspice Broad

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with IShares International and Direxion Auspice

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

The idea behind iShares International Treasury and Direxion Auspice Broad 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.