Correlation Between Direxion Daily and GraniteShares 125x
Can any of the company-specific risk be diversified away by investing in both Direxion Daily and GraniteShares 125x 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 GraniteShares 125x into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Direxion Daily Semiconductor and GraniteShares 125x Long, you can compare the effects of market volatilities on Direxion Daily and GraniteShares 125x 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 GraniteShares 125x. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and GraniteShares 125x.
Diversification Opportunities for Direxion Daily and GraniteShares 125x
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Direxion and GraniteShares is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Semiconductor and GraniteShares 125x Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares 125x Long 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 Semiconductor are associated (or correlated) with GraniteShares 125x. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GraniteShares 125x Long has no effect on the direction of Direxion Daily i.e., Direxion Daily and GraniteShares 125x go up and down completely randomly.
Pair Corralation between Direxion Daily and GraniteShares 125x
Given the investment horizon of 90 days Direxion Daily Semiconductor is expected to under-perform the GraniteShares 125x. But the etf apears to be less risky and, when comparing its historical volatility, Direxion Daily Semiconductor is 1.08 times less risky than GraniteShares 125x. The etf trades about -0.14 of its potential returns per unit of risk. The GraniteShares 125x Long is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,111 in GraniteShares 125x Long on August 26, 2024 and sell it today you would earn a total of 430.00 from holding GraniteShares 125x Long or generate 38.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Direxion Daily Semiconductor vs. GraniteShares 125x Long
Performance |
| Timeline |
| Direxion Daily Semic |
| GraniteShares 125x Long |
Direxion Daily and GraniteShares 125x Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Daily and GraniteShares 125x
The main advantage of trading using opposite Direxion Daily and GraniteShares 125x positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, GraniteShares 125x 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 GraniteShares 125x will offset losses from the drop in GraniteShares 125x's long position.| Direxion Daily vs. ProShares UltraPro QQQ | Direxion Daily vs. Direxion Daily Semiconductor | Direxion Daily vs. MicroSectors FANG Index | Direxion Daily vs. Direxion Daily Technology |
| GraniteShares 125x vs. Direxion Daily SP | GraniteShares 125x vs. Direxion Daily Semiconductor | GraniteShares 125x vs. Direxion Daily Semiconductor |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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