Correlation Between IShares and Direxion Shares
Can any of the company-specific risk be diversified away by investing in both IShares and Direxion Shares 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 IShares and Direxion Shares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IShares and Direxion Shares ETF, you can compare the effects of market volatilities on IShares and Direxion Shares 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 IShares with a short position of Direxion Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares and Direxion Shares.
Diversification Opportunities for IShares and Direxion Shares
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and Direxion is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding IShares and Direxion Shares ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direxion Shares ETF and IShares 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 IShares are associated (or correlated) with Direxion Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direxion Shares ETF has no effect on the direction of IShares i.e., IShares and Direxion Shares go up and down completely randomly.
Pair Corralation between IShares and Direxion Shares
If you would invest 6,301 in IShares on September 1, 2024 and sell it today you would earn a total of 0.00 from holding IShares or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
IShares vs. Direxion Shares ETF
Performance |
| Timeline |
| IShares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Direxion Shares ETF |
IShares and Direxion Shares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares and Direxion Shares
The main advantage of trading using opposite IShares and Direxion Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares position performs unexpectedly, Direxion Shares 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 Shares will offset losses from the drop in Direxion Shares' long position.| IShares vs. VanEck Merk Gold | IShares vs. Goldman Sachs Physical | IShares vs. GraniteShares Gold Trust | IShares vs. iShares Gold Trust |
| Direxion Shares vs. Direxion Daily MSCI | Direxion Shares vs. Innovator MSCI Emerging | Direxion Shares vs. Innovator ETFs Trust | Direxion Shares vs. Innovator MSCI Emerging |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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