Correlation Between Direxion Daily and Tidal Trust
Can any of the company-specific risk be diversified away by investing in both Direxion Daily and Tidal Trust 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 Tidal Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Direxion Daily SP and Tidal Trust II, you can compare the effects of market volatilities on Direxion Daily and Tidal Trust 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 Tidal Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and Tidal Trust.
Diversification Opportunities for Direxion Daily and Tidal Trust
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Direxion and Tidal is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily SP and Tidal Trust II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tidal Trust II 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 SP are associated (or correlated) with Tidal Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tidal Trust II has no effect on the direction of Direxion Daily i.e., Direxion Daily and Tidal Trust go up and down completely randomly.
Pair Corralation between Direxion Daily and Tidal Trust
Given the investment horizon of 90 days Direxion Daily SP is expected to under-perform the Tidal Trust. But the etf apears to be less risky and, when comparing its historical volatility, Direxion Daily SP is 1.56 times less risky than Tidal Trust. The etf trades about -0.1 of its potential returns per unit of risk. The Tidal Trust II is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,566 in Tidal Trust II on September 14, 2024 and sell it today you would lose (47.00) from holding Tidal Trust II or give up 3.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Direxion Daily SP vs. Tidal Trust II
Performance |
| Timeline |
| Direxion Daily SP |
| Tidal Trust II |
Direxion Daily and Tidal Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Daily and Tidal Trust
The main advantage of trading using opposite Direxion Daily and Tidal Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, Tidal Trust 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 Tidal Trust will offset losses from the drop in Tidal Trust's long position.| Direxion Daily vs. Direxion Daily SP | Direxion Daily vs. Direxion Daily Energy | Direxion Daily vs. Direxion Daily SP | Direxion Daily vs. Direxion Daily Junior |
| Tidal Trust vs. ProShares Ultra SP500 | Tidal Trust vs. Direxion Daily SP | Tidal Trust vs. Direxion Daily SP | Tidal Trust vs. MicroSectors FANG Index |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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