Correlation Between Direxion Daily and Mesirow Enhanced

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

Diversification Opportunities for Direxion Daily and Mesirow Enhanced

-0.57

Correlation Coefficient

Direxion Daily  Mesirow Enhanced

Excellent diversification

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

Pair Corralation between Direxion Daily and Mesirow Enhanced

Given the investment horizon of 90 days Direxion Daily Mid is expected to under-perform the Mesirow Enhanced. In addition to that, Direxion Daily is 12.74 times more volatile than Mesirow Enhanced Core. It trades about -0.1 of its total potential returns per unit of risk. Mesirow Enhanced Core is currently generating about 0.11 per unit of volatility. If you would invest  867.00  in Mesirow Enhanced Core on December 30, 2024 and sell it today you would earn a total of  12.00  from holding Mesirow Enhanced Core or generate 1.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	79.03%
Values	Daily Returns

Direxion Daily Mid  vs.  Mesirow Enhanced Core

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.

Mesirow Enhanced Core

Risk-Adjusted Performance

OK

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

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

The idea behind Direxion Daily Mid and Mesirow Enhanced Core 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.