Correlation Between Direxion Daily and Guggenheim Macro

Can any of the company-specific risk be diversified away by investing in both Direxion Daily and Guggenheim Macro 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 Guggenheim Macro 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 Guggenheim Macro Opportunities, you can compare the effects of market volatilities on Direxion Daily and Guggenheim Macro 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 Guggenheim Macro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and Guggenheim Macro.

Diversification Opportunities for Direxion Daily and Guggenheim Macro

-0.57

Correlation Coefficient

Direxion Daily  Guggenheim Macro

Excellent diversification

The 3 months correlation between Direxion and Guggenheim is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Mid and Guggenheim Macro Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Macro Opp 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 Guggenheim Macro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Macro Opp has no effect on the direction of Direxion Daily i.e., Direxion Daily and Guggenheim Macro go up and down completely randomly.

Pair Corralation between Direxion Daily and Guggenheim Macro

Given the investment horizon of 90 days Direxion Daily Mid is expected to under-perform the Guggenheim Macro. In addition to that, Direxion Daily is 57.38 times more volatile than Guggenheim Macro Opportunities. It trades about -0.2 of its total potential returns per unit of risk. Guggenheim Macro Opportunities is currently generating about -0.41 per unit of volatility. If you would invest  2,484  in Guggenheim Macro Opportunities on December 30, 2024 and sell it today you would lose (16.00) from holding Guggenheim Macro Opportunities or give up 0.64% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Direxion Daily Mid  vs.  Guggenheim Macro Opportunities

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.

Guggenheim Macro Opp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Guggenheim Macro Opportunities are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Guggenheim Macro 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 Guggenheim Macro

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

The idea behind Direxion Daily Mid and Guggenheim Macro Opportunities 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.