Correlation Between Direxion Daily and Direxion

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

Diversification Opportunities for Direxion Daily and Direxion

-0.37
  Correlation Coefficient

Very good diversification

The 3 months correlation between Direxion and Direxion is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily MSCI and Direxion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direxion 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 MSCI are associated (or correlated) with Direxion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direxion has no effect on the direction of Direxion Daily i.e., Direxion Daily and Direxion go up and down completely randomly.

Pair Corralation between Direxion Daily and Direxion

If you would invest  1,275  in Direxion on March 6, 2024 and sell it today you would earn a total of  0.00  from holding Direxion or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy5.0%
ValuesDaily Returns

Direxion Daily MSCI  vs.  Direxion

 Performance 
       Timeline  
Direxion Daily MSCI 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Direxion Daily MSCI has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Etf's basic indicators remain fairly strong which may send shares a bit higher in July 2024. The current disturbance may also be a sign of long term up-swing for the ETF investors.
Direxion 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Direxion has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Direxion is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Direxion Daily and Direxion Volatility Contrast

   Predicted Return Density   
       Returns  
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