Correlation Between Direxion Shares and Element ETFs
Can any of the company-specific risk be diversified away by investing in both Direxion Shares and Element ETFs 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 Shares and Element ETFs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Direxion Shares ETF and Element ETFs, you can compare the effects of market volatilities on Direxion Shares and Element ETFs 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 Shares with a short position of Element ETFs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Shares and Element ETFs.
Diversification Opportunities for Direxion Shares and Element ETFs
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Direxion and Element is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Shares ETF and Element ETFs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Element ETFs and Direxion Shares 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 Shares ETF are associated (or correlated) with Element ETFs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Element ETFs has no effect on the direction of Direxion Shares i.e., Direxion Shares and Element ETFs go up and down completely randomly.
Pair Corralation between Direxion Shares and Element ETFs
If you would invest 2,028 in Element ETFs on September 14, 2024 and sell it today you would earn a total of 0.00 from holding Element ETFs or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Direxion Shares ETF vs. Element ETFs
Performance |
| Timeline |
| Direxion Shares ETF |
| Element ETFs |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Direxion Shares and Element ETFs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Shares and Element ETFs
The main advantage of trading using opposite Direxion Shares and Element ETFs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Shares position performs unexpectedly, Element ETFs 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 Element ETFs will offset losses from the drop in Element ETFs' long position.| Direxion Shares vs. ProShares UltraShort MSCI | Direxion Shares vs. ProShares UltraShort MSCI | Direxion Shares vs. ProShares UltraShort Euro | Direxion Shares vs. ProShares UltraShort MSCI |
| Element ETFs vs. Invesco Electric Vehicle | Element ETFs vs. WisdomTree Battery Value | Element ETFs vs. Rbb Fund | Element ETFs vs. Direxion Shares ETF |
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..
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |