Correlation Between Diamond Hill and Direxion Daily
Can any of the company-specific risk be diversified away by investing in both Diamond Hill 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 Diamond Hill and Direxion Daily into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diamond Hill Funds and Direxion Daily SP, you can compare the effects of market volatilities on Diamond Hill 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 Diamond Hill with a short position of Direxion Daily. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamond Hill and Direxion Daily.
Diversification Opportunities for Diamond Hill and Direxion Daily
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Diamond and Direxion is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Diamond Hill Funds and Direxion Daily SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direxion Daily SP and Diamond Hill 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 Diamond Hill Funds 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 SP has no effect on the direction of Diamond Hill i.e., Diamond Hill and Direxion Daily go up and down completely randomly.
Pair Corralation between Diamond Hill and Direxion Daily
Given the investment horizon of 90 days Diamond Hill Funds is expected to generate 0.94 times more return on investment than Direxion Daily. However, Diamond Hill Funds is 1.07 times less risky than Direxion Daily. It trades about -0.03 of its potential returns per unit of risk. Direxion Daily SP is currently generating about -0.06 per unit of risk. If you would invest 1,311 in Diamond Hill Funds on September 10, 2025 and sell it today you would lose (15.00) from holding Diamond Hill Funds or give up 1.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 79.69% |
| Values | Daily Returns |
Diamond Hill Funds vs. Direxion Daily SP
Performance |
| Timeline |
| Diamond Hill Funds |
| Direxion Daily SP |
Diamond Hill and Direxion Daily Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamond Hill and Direxion Daily
The main advantage of trading using opposite Diamond Hill and Direxion Daily positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamond Hill 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.| Diamond Hill vs. RiverFront Dynamic Flex Cap | Diamond Hill vs. First Trust Horizon | Diamond Hill vs. Formidable ETF | Diamond Hill vs. Formidable Fortress ETF |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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