Correlation Between Direxion Daily and Tiaa Cref

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

Diversification Opportunities for Direxion Daily and Tiaa Cref

0.94

Correlation Coefficient

Direxion Daily  Tiaa Cref

Almost no diversification

The 3 months correlation between Direxion and Tiaa is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Mid and Tiaa Cref Large Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Large 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 Tiaa Cref. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tiaa Cref Large has no effect on the direction of Direxion Daily i.e., Direxion Daily and Tiaa Cref go up and down completely randomly.

Pair Corralation between Direxion Daily and Tiaa Cref

Given the investment horizon of 90 days Direxion Daily Mid is expected to under-perform the Tiaa Cref. In addition to that, Direxion Daily is 2.25 times more volatile than Tiaa Cref Large Cap Growth. It trades about -0.1 of its total potential returns per unit of risk. Tiaa Cref Large Cap Growth is currently generating about -0.12 per unit of volatility. If you would invest  6,759  in Tiaa Cref Large Cap Growth on December 30, 2024 and sell it today you would lose (735.00) from holding Tiaa Cref Large Cap Growth or give up 10.87% of portfolio value over 90 days.

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

Direxion Daily Mid  vs.  Tiaa Cref Large Cap Growth

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.

Tiaa Cref Large

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tiaa Cref Large Cap Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest unfluctuating performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Direxion Daily and Tiaa Cref

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

The idea behind Direxion Daily Mid and Tiaa Cref Large Cap Growth 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.