Correlation Between Direxion Daily and Hartford Sustainable

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

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

Diversification Opportunities for Direxion Daily and Hartford Sustainable

-0.68

Correlation Coefficient

Direxion Daily  Hartford Sustainable

Excellent diversification

The 3 months correlation between Direxion and Hartford is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily NVDA and Hartford Sustainable Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Sustainable 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 NVDA are associated (or correlated) with Hartford Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Sustainable has no effect on the direction of Direxion Daily i.e., Direxion Daily and Hartford Sustainable go up and down completely randomly.

Pair Corralation between Direxion Daily and Hartford Sustainable

Given the investment horizon of 90 days Direxion Daily NVDA is expected to under-perform the Hartford Sustainable. In addition to that, Direxion Daily is 38.17 times more volatile than Hartford Sustainable Income. It trades about -0.07 of its total potential returns per unit of risk. Hartford Sustainable Income is currently generating about 0.14 per unit of volatility. If you would invest  3,388  in Hartford Sustainable Income on December 30, 2024 and sell it today you would earn a total of  65.00  from holding Hartford Sustainable Income or generate 1.92% return on investment over 90 days.

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

Direxion Daily NVDA  vs.  Hartford Sustainable Income

Direxion Daily NVDA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Direxion Daily NVDA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak 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.

Hartford Sustainable

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hartford Sustainable Income are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Hartford Sustainable is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Direxion Daily and Hartford Sustainable

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

The idea behind Direxion Daily NVDA and Hartford Sustainable Income 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.