Correlation Between Grayscale Funds and Direxion Daily
Can any of the company-specific risk be diversified away by investing in both Grayscale Funds and Direxion Daily 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 Grayscale Funds and Direxion Daily into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grayscale Funds Trust and Direxion Daily FTSE, you can compare the effects of market volatilities on Grayscale Funds and Direxion Daily 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 Grayscale Funds with a short position of Direxion Daily. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Funds and Direxion Daily.
Diversification Opportunities for Grayscale Funds and Direxion Daily
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Grayscale and Direxion is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Funds Trust and Direxion Daily FTSE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direxion Daily FTSE and Grayscale Funds 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 Grayscale Funds Trust are associated (or correlated) with Direxion Daily. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direxion Daily FTSE has no effect on the direction of Grayscale Funds i.e., Grayscale Funds and Direxion Daily go up and down completely randomly.
Pair Corralation between Grayscale Funds and Direxion Daily
Considering the 90-day investment horizon Grayscale Funds Trust is expected to under-perform the Direxion Daily. But the etf apears to be less risky and, when comparing its historical volatility, Grayscale Funds Trust is 1.11 times less risky than Direxion Daily. The etf trades about -0.08 of its potential returns per unit of risk. The Direxion Daily FTSE is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 3,325 in Direxion Daily FTSE on March 27, 2025 and sell it today you would lose (1.00) from holding Direxion Daily FTSE or give up 0.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grayscale Funds Trust vs. Direxion Daily FTSE
Performance |
| Timeline |
| Grayscale Funds Trust |
| Direxion Daily FTSE |
Grayscale Funds and Direxion Daily Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Funds and Direxion Daily
The main advantage of trading using opposite Grayscale Funds and Direxion Daily positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Funds position performs unexpectedly, Direxion Daily 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 Direxion Daily will offset losses from the drop in Direxion Daily's long position.| Grayscale Funds vs. Roundhill Bitcoin Covered | Grayscale Funds vs. Roundhill Ether Covered | Grayscale Funds vs. Amplify Bitcoin Max | Grayscale Funds vs. Global X Funds |
| Direxion Daily vs. Direxion Daily South | Direxion Daily vs. Direxion Daily Mid | Direxion Daily vs. Direxion Daily MSCI | Direxion Daily vs. Direxion Daily MSCI |
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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