Correlation Between Direxion Daily and VanEck Vietnam

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

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

Diversification Opportunities for Direxion Daily and VanEck Vietnam

-0.83

Correlation Coefficient

Direxion Daily  VanEck Vietnam

Pay attention - limited upside

The 3 months correlation between Direxion and VanEck is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Technology and VanEck Vietnam ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Vietnam ETF 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 Technology are associated (or correlated) with VanEck Vietnam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Vietnam ETF has no effect on the direction of Direxion Daily i.e., Direxion Daily and VanEck Vietnam go up and down completely randomly.

Pair Corralation between Direxion Daily and VanEck Vietnam

Given the investment horizon of 90 days Direxion Daily Technology is expected to under-perform the VanEck Vietnam. In addition to that, Direxion Daily is 4.95 times more volatile than VanEck Vietnam ETF. It trades about -0.1 of its total potential returns per unit of risk. VanEck Vietnam ETF is currently generating about 0.14 per unit of volatility. If you would invest  1,155  in VanEck Vietnam ETF on December 28, 2024 and sell it today you would earn a total of  101.00  from holding VanEck Vietnam ETF or generate 8.74% return on investment over 90 days.

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

Direxion Daily Technology  vs.  VanEck Vietnam ETF

Direxion Daily Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Direxion Daily Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Etf's fundamental 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.

VanEck Vietnam ETF

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck Vietnam ETF are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, VanEck Vietnam may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Direxion Daily and VanEck Vietnam

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

The idea behind Direxion Daily Technology and VanEck Vietnam ETF 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.