Correlation Between Direxion Daily and SPDR SSGA
Can any of the company-specific risk be diversified away by investing in both Direxion Daily and SPDR SSGA 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 SPDR SSGA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Direxion Daily Regional and SPDR SSGA My2028, you can compare the effects of market volatilities on Direxion Daily and SPDR SSGA 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 SPDR SSGA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and SPDR SSGA.
Diversification Opportunities for Direxion Daily and SPDR SSGA
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Direxion and SPDR is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Regional and SPDR SSGA My2028 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SSGA My2028 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 Regional are associated (or correlated) with SPDR SSGA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SSGA My2028 has no effect on the direction of Direxion Daily i.e., Direxion Daily and SPDR SSGA go up and down completely randomly.
Pair Corralation between Direxion Daily and SPDR SSGA
Given the investment horizon of 90 days Direxion Daily Regional is expected to under-perform the SPDR SSGA. In addition to that, Direxion Daily is 26.08 times more volatile than SPDR SSGA My2028. It trades about -0.07 of its total potential returns per unit of risk. SPDR SSGA My2028 is currently generating about -0.08 per unit of volatility. If you would invest 2,435 in SPDR SSGA My2028 on January 10, 2025 and sell it today you would lose (31.00) from holding SPDR SSGA My2028 or give up 1.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Direxion Daily Regional vs. SPDR SSGA My2028
Performance |
| Timeline |
| Direxion Daily Regional |
| SPDR SSGA My2028 |
Direxion Daily and SPDR SSGA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Daily and SPDR SSGA
The main advantage of trading using opposite Direxion Daily and SPDR SSGA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, SPDR SSGA 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 SPDR SSGA will offset losses from the drop in SPDR SSGA's long position.| Direxion Daily vs. Direxion Daily Homebuilders | Direxion Daily vs. Direxion Daily Retail | Direxion Daily vs. Direxion Daily Transportation | Direxion Daily vs. Direxion Daily Aerospace |
| SPDR SSGA vs. iShares iBonds Dec | SPDR SSGA vs. iShares iBonds Dec | SPDR SSGA vs. iShares Trust | SPDR SSGA vs. Invesco BulletShares 2025 |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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