Correlation Between Blackrock International and Direxion Monthly
Can any of the company-specific risk be diversified away by investing in both Blackrock International and Direxion Monthly 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 Blackrock International and Direxion Monthly into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackrock International Index and Direxion Monthly Nasdaq 100, you can compare the effects of market volatilities on Blackrock International and Direxion Monthly 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 Blackrock International with a short position of Direxion Monthly. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock International and Direxion Monthly.
Diversification Opportunities for Blackrock International and Direxion Monthly
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Blackrock and Direxion is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock International Index and Direxion Monthly Nasdaq 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direxion Monthly Nasdaq and Blackrock International 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 Blackrock International Index are associated (or correlated) with Direxion Monthly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direxion Monthly Nasdaq has no effect on the direction of Blackrock International i.e., Blackrock International and Direxion Monthly go up and down completely randomly.
Pair Corralation between Blackrock International and Direxion Monthly
Assuming the 90 days horizon Blackrock International is expected to generate 2.84 times less return on investment than Direxion Monthly. But when comparing it to its historical volatility, Blackrock International Index is 1.66 times less risky than Direxion Monthly. It trades about 0.09 of its potential returns per unit of risk. Direxion Monthly Nasdaq 100 is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 9,325 in Direxion Monthly Nasdaq 100 on June 3, 2025 and sell it today you would earn a total of 1,226 from holding Direxion Monthly Nasdaq 100 or generate 13.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackrock International Index vs. Direxion Monthly Nasdaq 100
Performance |
| Timeline |
| Blackrock International |
| Direxion Monthly Nasdaq |
Blackrock International and Direxion Monthly Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock International and Direxion Monthly
The main advantage of trading using opposite Blackrock International and Direxion Monthly positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock International position performs unexpectedly, Direxion Monthly 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 Monthly will offset losses from the drop in Direxion Monthly's long position.| Blackrock International vs. Blackrock Midcap Index | Blackrock International vs. T Rowe Price | Blackrock International vs. State Street Equity | Blackrock International vs. Blackrock Sp 500 |
| Direxion Monthly vs. Direxion Monthly Sp | Direxion Monthly vs. Direxion Monthly Small | Direxion Monthly vs. Nasdaq 100 2x Strategy | Direxion Monthly vs. Nasdaq 100 2x Strategy |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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