Correlation Between Direxion Daily and Janus Growth

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

Diversification Opportunities for Direxion Daily and Janus Growth

0.8

Correlation Coefficient

Direxion Daily  Janus Growth

Very poor diversification

The 3 months correlation between Direxion and Janus is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Mid and Janus Growth And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Growth And 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 Janus Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Growth And has no effect on the direction of Direxion Daily i.e., Direxion Daily and Janus Growth go up and down completely randomly.

Pair Corralation between Direxion Daily and Janus Growth

Given the investment horizon of 90 days Direxion Daily Mid is expected to under-perform the Janus Growth. In addition to that, Direxion Daily is 3.36 times more volatile than Janus Growth And. It trades about -0.11 of its total potential returns per unit of risk. Janus Growth And is currently generating about -0.05 per unit of volatility. If you would invest  6,922  in Janus Growth And on December 29, 2024 and sell it today you would lose (223.00) from holding Janus Growth And or give up 3.22% of portfolio value over 90 days.

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

Direxion Daily Mid  vs.  Janus Growth And

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.

Janus Growth And

Risk-Adjusted Performance

Very Weak

Over the last 90 days Janus Growth And has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Janus Growth 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 Janus Growth

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

The idea behind Direxion Daily Mid and Janus Growth And 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.