Correlation Between ETF Managers and Direxion Daily

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

By analyzing existing cross correlation between ETF Managers Group and Direxion Daily SP, you can compare the effects of market volatilities on ETF Managers and Direxion Daily 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 ETF Managers with a short position of Direxion Daily. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETF Managers and Direxion Daily.

Diversification Opportunities for ETF Managers and Direxion Daily

0.0

Correlation Coefficient

ETF Managers  Direxion Daily

Pay attention - limited upside

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

Pair Corralation between ETF Managers and Direxion Daily

If you would invest (100.00) in ETF Managers Group on December 27, 2024 and sell it today you would earn a total of  100.00  from holding ETF Managers Group or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

ETF Managers Group  vs.  Direxion Daily SP

ETF Managers Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days ETF Managers Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, ETF Managers is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Direxion Daily SP

Risk-Adjusted Performance

Very Weak

Over the last 90 days Direxion Daily SP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Etf's fundamental drivers remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.

Pair Trading with ETF Managers and Direxion Daily

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

The idea behind ETF Managers Group and Direxion Daily SP 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.