Correlation Between Direxion Daily and ClearShares Piton

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

Diversification Opportunities for Direxion Daily and ClearShares Piton

-0.84

Correlation Coefficient

Direxion Daily  ClearShares Piton

Pay attention - limited upside

The 3 months correlation between Direxion and ClearShares is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily NVDA and ClearShares Piton Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ClearShares Piton 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 ClearShares Piton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ClearShares Piton has no effect on the direction of Direxion Daily i.e., Direxion Daily and ClearShares Piton go up and down completely randomly.

Pair Corralation between Direxion Daily and ClearShares Piton

Given the investment horizon of 90 days Direxion Daily NVDA is expected to under-perform the ClearShares Piton. In addition to that, Direxion Daily is 48.08 times more volatile than ClearShares Piton Intermediate. It trades about -0.05 of its total potential returns per unit of risk. ClearShares Piton Intermediate is currently generating about 0.22 per unit of volatility. If you would invest  9,176  in ClearShares Piton Intermediate on December 22, 2024 and sell it today you would earn a total of  211.00  from holding ClearShares Piton Intermediate or generate 2.3% return on investment over 90 days.

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

Direxion Daily NVDA  vs.  ClearShares Piton Intermediate

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 uncertain 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.

ClearShares Piton

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ClearShares Piton Intermediate are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical and fundamental indicators, ClearShares Piton is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Direxion Daily and ClearShares Piton

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

The idea behind Direxion Daily NVDA and ClearShares Piton Intermediate 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.