Correlation Between Direxion Daily and GraniteShares 15x
Can any of the company-specific risk be diversified away by investing in both Direxion Daily and GraniteShares 15x 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 15x into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Direxion Daily SP500 and GraniteShares 15x Long, you can compare the effects of market volatilities on Direxion Daily and GraniteShares 15x 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 15x. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and GraniteShares 15x.
Diversification Opportunities for Direxion Daily and GraniteShares 15x
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Direxion and GraniteShares is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily SP500 and GraniteShares 15x Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares 15x 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 SP500 are associated (or correlated) with GraniteShares 15x. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GraniteShares 15x Long has no effect on the direction of Direxion Daily i.e., Direxion Daily and GraniteShares 15x go up and down completely randomly.
Pair Corralation between Direxion Daily and GraniteShares 15x
Given the investment horizon of 90 days Direxion Daily SP500 is expected to generate 0.57 times more return on investment than GraniteShares 15x. However, Direxion Daily SP500 is 1.76 times less risky than GraniteShares 15x. It trades about 0.08 of its potential returns per unit of risk. GraniteShares 15x Long is currently generating about 0.04 per unit of risk. If you would invest 17,054 in Direxion Daily SP500 on August 23, 2024 and sell it today you would earn a total of 662.00 from holding Direxion Daily SP500 or generate 3.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Direxion Daily SP500 vs. GraniteShares 15x Long
Performance |
| Timeline |
| Direxion Daily SP500 |
| GraniteShares 15x Long |
Direxion Daily and GraniteShares 15x Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Daily and GraniteShares 15x
The main advantage of trading using opposite Direxion Daily and GraniteShares 15x positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, GraniteShares 15x 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 15x will offset losses from the drop in GraniteShares 15x's long position.| Direxion Daily vs. ProShares Ultra SP500 | Direxion Daily vs. ProShares Ultra QQQ | Direxion Daily vs. ProShares UltraPro SP500 | Direxion Daily vs. Direxion Daily Technology |
| GraniteShares 15x vs. ProShares Ultra SP500 | GraniteShares 15x vs. ProShares Ultra QQQ | GraniteShares 15x vs. ProShares UltraPro SP500 | GraniteShares 15x vs. Direxion Daily Technology |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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