Correlation Between FT Cboe and Direxion Daily
Can any of the company-specific risk be diversified away by investing in both FT Cboe 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 FT Cboe and Direxion Daily into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FT Cboe Vest and Direxion Daily CSI, you can compare the effects of market volatilities on FT Cboe 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 FT Cboe with a short position of Direxion Daily. Check out your portfolio center. Please also check ongoing floating volatility patterns of FT Cboe and Direxion Daily.
Diversification Opportunities for FT Cboe and Direxion Daily
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between DNOV and Direxion is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding FT Cboe Vest and Direxion Daily CSI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direxion Daily CSI and FT Cboe 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 FT Cboe Vest 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 CSI has no effect on the direction of FT Cboe i.e., FT Cboe and Direxion Daily go up and down completely randomly.
Pair Corralation between FT Cboe and Direxion Daily
Given the investment horizon of 90 days FT Cboe is expected to generate 1.58 times less return on investment than Direxion Daily. But when comparing it to its historical volatility, FT Cboe Vest is 10.87 times less risky than Direxion Daily. It trades about 0.19 of its potential returns per unit of risk. Direxion Daily CSI is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 4,348 in Direxion Daily CSI on October 9, 2025 and sell it today you would earn a total of 38.00 from holding Direxion Daily CSI or generate 0.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FT Cboe Vest vs. Direxion Daily CSI
Performance |
| Timeline |
| FT Cboe Vest |
| Direxion Daily CSI |
FT Cboe and Direxion Daily Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FT Cboe and Direxion Daily
The main advantage of trading using opposite FT Cboe and Direxion Daily positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FT Cboe 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.| FT Cboe vs. First Trust Exchange Traded | FT Cboe vs. First Trust Exchange Traded | FT Cboe vs. First Trust Exchange Traded | FT Cboe vs. FT Cboe Vest |
| Direxion Daily vs. ProShares UltraPro Russell2000 | Direxion Daily vs. JPMorgan Diversified Return | Direxion Daily vs. FlexShares Global Quality | Direxion Daily vs. iShares MSCI Sweden |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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