Correlation Between Tuttle Capital and Direxion Daily

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

By analyzing existing cross correlation between Tuttle Capital Daily and Direxion Daily Regional, you can compare the effects of market volatilities on Tuttle Capital and Direxion Daily 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 Tuttle Capital with a short position of Direxion Daily. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tuttle Capital and Direxion Daily.

Diversification Opportunities for Tuttle Capital and Direxion Daily

-0.99

Correlation Coefficient

Tuttle Capital  Direxion Daily

Pay attention - limited upside

The 3 months correlation between Tuttle and Direxion is -0.99. Overlapping area represents the amount of risk that can be diversified away by holding Tuttle Capital Daily and Direxion Daily Regional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direxion Daily Regional and Tuttle Capital 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 Tuttle Capital Daily are associated (or correlated) with Direxion Daily. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direxion Daily Regional has no effect on the direction of Tuttle Capital i.e., Tuttle Capital and Direxion Daily go up and down completely randomly.

Pair Corralation between Tuttle Capital and Direxion Daily

Given the investment horizon of 90 days Tuttle Capital Daily is expected to under-perform the Direxion Daily. But the etf apears to be less risky and, when comparing its historical volatility, Tuttle Capital Daily is 1.52 times less risky than Direxion Daily. The etf trades about -0.11 of its potential returns per unit of risk. The Direxion Daily Regional is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  9,815  in Direxion Daily Regional on September 14, 2024 and sell it today you would earn a total of  3,950  from holding Direxion Daily Regional or generate 40.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Tuttle Capital Daily  vs.  Direxion Daily Regional

Tuttle Capital Daily

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tuttle Capital Daily 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 basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the fund shareholders.

Direxion Daily Regional

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Direxion Daily Regional are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Direxion Daily unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tuttle Capital and Direxion Daily

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

The idea behind Tuttle Capital Daily and Direxion Daily Regional 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.