Correlation Between Direxion Daily and IShares Core
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By analyzing existing cross correlation between Direxion Daily Mid and iShares Core SP, you can compare the effects of market volatilities on Direxion Daily and IShares Core 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 IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and IShares Core.
Diversification Opportunities for Direxion Daily and IShares Core
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Direxion and IShares is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Mid and iShares Core SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core SP 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 Mid are associated (or correlated) with IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core SP has no effect on the direction of Direxion Daily i.e., Direxion Daily and IShares Core go up and down completely randomly.
Pair Corralation between Direxion Daily and IShares Core
Given the investment horizon of 90 days Direxion Daily Mid is expected to generate 4.69 times more return on investment than IShares Core. However, Direxion Daily is 4.69 times more volatile than iShares Core SP. It trades about 0.28 of its potential returns per unit of risk. iShares Core SP is currently generating about 0.15 per unit of risk. If you would invest 5,385 in Direxion Daily Mid on September 5, 2024 and sell it today you would earn a total of 1,235 from holding Direxion Daily Mid or generate 22.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 86.36% |
| Values | Daily Returns |
Direxion Daily Mid vs. iShares Core SP
Performance |
| Timeline |
| Direxion Daily Mid |
| iShares Core SP |
Direxion Daily and IShares Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Daily and IShares Core
The main advantage of trading using opposite Direxion Daily and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, IShares Core 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 IShares Core will offset losses from the drop in IShares Core's long position.| Direxion Daily vs. Direxion Daily Retail | Direxion Daily vs. Direxion Daily Industrials | Direxion Daily vs. Direxion Daily Transportation | Direxion Daily vs. Direxion Daily FTSE |
| IShares Core vs. iShares SP 500 | IShares Core vs. iShares MSCI ACWI | IShares Core vs. iShares NASDAQ 100 | IShares Core vs. iShares Healthcare Innovation |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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