Drawing circular diagram with arrows

Question

How can draw a circular diagram with arrows in LaTeX (cf. Figure)?

Answer 1

The three arcs can be drawn initially as a circle, then the labels can be drawn on top with white background. The decorations library can be used to place all kinds of marks on a path like arrows. Unfortunately it is slightly verbose.

\documentclass[border=5pt]{standalone}
\usepackage{tikz}
\usetikzlibrary{calc, arrows, decorations.markings}
\begin{document}

\begin{tikzpicture}[decoration = {markings,
    mark = between positions 0.1 and 1 step 0.3333 with {\arrow[>=stealth]{<}}
  }
  ]
  \draw[postaction = decorate] (0, 0) circle [radius = 1cm];
  \path (90 :1cm) node[fill=white]{$\hat{x}$}
        (330:1cm) node[fill=white]{$\hat{y}$}
        (210:1cm) node[fill=white]{$\hat{z}$};
\end{tikzpicture}

\end{document}

Another option is this:

\begin{tikzpicture}[decoration = {markings,
    mark = at position 0.5 with {\arrow[>=stealth]{>}}
  }
  ]
  \path (90 :1cm) node (x) {$\hat{x}$}
        (330:1cm) node (y) {$\hat{y}$}
        (210:1cm) node (z) {$\hat{z}$};
  \draw[postaction = decorate] (x) to[bend left=45] (y);
  \draw[postaction = decorate] (y) to[bend left=45] (z);
  \draw[postaction = decorate] (z) to[bend left=45] (x);
\end{tikzpicture}

with a similar output: