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 NVDA and SPDR SSGA Fixed, 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
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Direxion and SPDR is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily NVDA and SPDR SSGA Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SSGA Fixed 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 NVDA 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 Fixed 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 NVDA is expected to generate 14.01 times more return on investment than SPDR SSGA. However, Direxion Daily is 14.01 times more volatile than SPDR SSGA Fixed. It trades about 0.12 of its potential returns per unit of risk. SPDR SSGA Fixed is currently generating about 0.04 per unit of risk. If you would invest 2,498 in Direxion Daily NVDA on September 2, 2024 and sell it today you would earn a total of 9,115 from holding Direxion Daily NVDA or generate 364.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 82.8% |
| Values | Daily Returns |
Direxion Daily NVDA vs. SPDR SSGA Fixed
Performance |
| Timeline |
| Direxion Daily NVDA |
| SPDR SSGA Fixed |
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. Tidal Trust II | Direxion Daily vs. Tidal Trust II | Direxion Daily vs. Direxion Daily META | Direxion Daily vs. Direxion Daily META |
| SPDR SSGA vs. SPDR SSGA Sector | SPDR SSGA vs. SPDR DoubleLine Emerging | SPDR SSGA vs. SPDR DoubleLine Short | SPDR SSGA vs. SPDR SSgA Ultra |
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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