Correlation Between Direxion Daily and KLNE

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

By analyzing existing cross correlation between Direxion Daily Cloud and KLNE, you can compare the effects of market volatilities on Direxion Daily and KLNE 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 KLNE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and KLNE.

Diversification Opportunities for Direxion Daily and KLNE

0.0

Correlation Coefficient

Direxion Daily  KLNE

Pay attention - limited upside

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

Pair Corralation between Direxion Daily and KLNE

If you would invest (100.00) in KLNE on December 22, 2024 and sell it today you would earn a total of  100.00  from holding KLNE 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

Direxion Daily Cloud  vs.  KLNE

Direxion Daily Cloud

Risk-Adjusted Performance

Very Weak

Over the last 90 days Direxion Daily Cloud has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Etf's fundamental indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the ETF venture institutional investors.

KLNE

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Direxion Daily and KLNE

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

The idea behind Direxion Daily Cloud and KLNE 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..