Correlation Between Direxion Monthly and Nasdaq 100
Can any of the company-specific risk be diversified away by investing in both Direxion Monthly and Nasdaq 100 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 Monthly and Nasdaq 100 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Direxion Monthly Small and Nasdaq 100 2x Strategy, you can compare the effects of market volatilities on Direxion Monthly and Nasdaq 100 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 Monthly with a short position of Nasdaq 100. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Monthly and Nasdaq 100.
Diversification Opportunities for Direxion Monthly and Nasdaq 100
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Direxion and Nasdaq is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Monthly Small and Nasdaq 100 2x Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq 100 2x and Direxion Monthly 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 Monthly Small are associated (or correlated) with Nasdaq 100. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq 100 2x has no effect on the direction of Direxion Monthly i.e., Direxion Monthly and Nasdaq 100 go up and down completely randomly.
Pair Corralation between Direxion Monthly and Nasdaq 100
Assuming the 90 days horizon Direxion Monthly Small is expected to generate 1.28 times more return on investment than Nasdaq 100. However, Direxion Monthly is 1.28 times more volatile than Nasdaq 100 2x Strategy. It trades about 0.17 of its potential returns per unit of risk. Nasdaq 100 2x Strategy is currently generating about 0.15 per unit of risk. If you would invest 7,442 in Direxion Monthly Small on June 3, 2025 and sell it today you would earn a total of 1,595 from holding Direxion Monthly Small or generate 21.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Direxion Monthly Small vs. Nasdaq 100 2x Strategy
Performance |
| Timeline |
| Direxion Monthly Small |
| Nasdaq 100 2x |
Direxion Monthly and Nasdaq 100 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Monthly and Nasdaq 100
The main advantage of trading using opposite Direxion Monthly and Nasdaq 100 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Monthly position performs unexpectedly, Nasdaq 100 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 Nasdaq 100 will offset losses from the drop in Nasdaq 100's long position.| Direxion Monthly vs. Flkypx | Direxion Monthly vs. T Rowe Price | Direxion Monthly vs. Abr 7525 Volatility | Direxion Monthly vs. Fa 529 Aggressive |
| Nasdaq 100 vs. Sp 500 2x | Nasdaq 100 vs. Inverse Nasdaq 100 2x | Nasdaq 100 vs. Inverse Sp 500 | Nasdaq 100 vs. Ultra Nasdaq 100 Profunds |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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