Correlation Between Direxion Daily and Global X
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By analyzing existing cross correlation between Direxion Daily Mid and Global X SP, you can compare the effects of market volatilities on Direxion Daily and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and Global X.
Diversification Opportunities for Direxion Daily and Global X
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Direxion and Global is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Mid and Global X SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X SP has no effect on the direction of Direxion Daily i.e., Direxion Daily and Global X go up and down completely randomly.
Pair Corralation between Direxion Daily and Global X
Given the investment horizon of 90 days Direxion Daily Mid is expected to generate 4.97 times more return on investment than Global X. However, Direxion Daily is 4.97 times more volatile than Global X SP. It trades about 0.32 of its potential returns per unit of risk. Global X SP is currently generating about 0.43 per unit of risk. If you would invest 5,385 in Direxion Daily Mid on September 4, 2024 and sell it today you would earn a total of 1,347 from holding Direxion Daily Mid or generate 25.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 90.91% |
| Values | Daily Returns |
Direxion Daily Mid vs. Global X SP
Performance |
| Timeline |
| Direxion Daily Mid |
| Global X SP |
Direxion Daily and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Daily and Global X
The main advantage of trading using opposite Direxion Daily and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X'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 |
| Global X vs. UBS Fund Solutions | Global X vs. Xtrackers II | Global X vs. Xtrackers Nikkei 225 | Global X vs. iShares VII PLC |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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