Correlation Between Direxion Daily and Kurv Technology

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

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

Diversification Opportunities for Direxion Daily and Kurv Technology

0.8

Correlation Coefficient

Direxion Daily  Kurv Technology

Very poor diversification

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

Pair Corralation between Direxion Daily and Kurv Technology

Given the investment horizon of 90 days Direxion Daily Homebuilders is expected to under-perform the Kurv Technology. In addition to that, Direxion Daily is 2.93 times more volatile than Kurv Technology Titans. It trades about -0.06 of its total potential returns per unit of risk. Kurv Technology Titans is currently generating about -0.12 per unit of volatility. If you would invest  2,706  in Kurv Technology Titans on December 28, 2024 and sell it today you would lose (310.00) from holding Kurv Technology Titans or give up 11.46% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.36%
Values	Daily Returns

Direxion Daily Homebuilders  vs.  Kurv Technology Titans

Direxion Daily Homeb

Risk-Adjusted Performance

Very Weak

Over the last 90 days Direxion Daily Homebuilders has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Etf's forward indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the ETF venture institutional investors.

Kurv Technology Titans

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kurv Technology Titans has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest conflicting performance, the Etf's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the ETF retail investors.

Pair Trading with Direxion Daily and Kurv Technology

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

The idea behind Direxion Daily Homebuilders and Kurv Technology Titans 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.

Check out your portfolio center.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.