Correlation Between Direxion Daily and Sprott Junior
Can any of the company-specific risk be diversified away by investing in both Direxion Daily and Sprott Junior 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 Daily and Sprott Junior into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Direxion Daily Gold and Sprott Junior Gold, you can compare the effects of market volatilities on Direxion Daily and Sprott Junior 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 Daily with a short position of Sprott Junior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and Sprott Junior.
Diversification Opportunities for Direxion Daily and Sprott Junior
-0.98 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Direxion and Sprott is -0.98. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Gold and Sprott Junior Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Junior Gold and Direxion Daily 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 Daily Gold are associated (or correlated) with Sprott Junior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Junior Gold has no effect on the direction of Direxion Daily i.e., Direxion Daily and Sprott Junior go up and down completely randomly.
Pair Corralation between Direxion Daily and Sprott Junior
Given the investment horizon of 90 days Direxion Daily Gold is expected to under-perform the Sprott Junior. In addition to that, Direxion Daily is 1.86 times more volatile than Sprott Junior Gold. It trades about -0.11 of its total potential returns per unit of risk. Sprott Junior Gold is currently generating about 0.18 per unit of volatility. If you would invest 6,138 in Sprott Junior Gold on September 9, 2025 and sell it today you would earn a total of 2,207 from holding Sprott Junior Gold or generate 35.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Direxion Daily Gold vs. Sprott Junior Gold
Performance |
| Timeline |
| Direxion Daily Gold |
| Sprott Junior Gold |
Direxion Daily and Sprott Junior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Daily and Sprott Junior
The main advantage of trading using opposite Direxion Daily and Sprott Junior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, Sprott Junior 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 Sprott Junior will offset losses from the drop in Sprott Junior's long position.| Direxion Daily vs. Direxion Daily SP | Direxion Daily vs. Direxion Daily CSI | Direxion Daily vs. ProShares UltraShort Bloomberg | Direxion Daily vs. WisdomTree Bloomberg Dollar |
| Sprott Junior vs. Northern Lights | Sprott Junior vs. American Century ETF | Sprott Junior vs. OneAscent International Equity | Sprott Junior vs. Goldman Sachs Innovate |
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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.
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