Correlation Between Direxion Daily and Segall Bryant

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

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

Diversification Opportunities for Direxion Daily and Segall Bryant

0.02

Correlation Coefficient

Direxion Daily  Segall Bryant

Significant diversification

The 3 months correlation between Direxion and Segall is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Mid and Segall Bryant Hamll in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Segall Bryant Hamll 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 Mid are associated (or correlated) with Segall Bryant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Segall Bryant Hamll has no effect on the direction of Direxion Daily i.e., Direxion Daily and Segall Bryant go up and down completely randomly.

Pair Corralation between Direxion Daily and Segall Bryant

Given the investment horizon of 90 days Direxion Daily Mid is expected to under-perform the Segall Bryant. In addition to that, Direxion Daily is 3.28 times more volatile than Segall Bryant Hamll. It trades about -0.15 of its total potential returns per unit of risk. Segall Bryant Hamll is currently generating about 0.09 per unit of volatility. If you would invest  1,068  in Segall Bryant Hamll on December 2, 2024 and sell it today you would earn a total of  46.00  from holding Segall Bryant Hamll or generate 4.31% return on investment over 90 days.

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

Direxion Daily Mid  vs.  Segall Bryant Hamll

Direxion Daily Mid

Risk-Adjusted Performance

Very Weak

Over the last 90 days Direxion Daily Mid has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Etf's fundamental indicators 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.

Segall Bryant Hamll

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Segall Bryant Hamll are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Segall Bryant is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Direxion Daily and Segall Bryant

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

The idea behind Direxion Daily Mid and Segall Bryant Hamll 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.