Correlation Between Direxion Daily and Pacer Metarus
Can any of the company-specific risk be diversified away by investing in both Direxion Daily and Pacer Metarus 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 Pacer Metarus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Direxion Daily South and Pacer Metarus Nasdaq, you can compare the effects of market volatilities on Direxion Daily and Pacer Metarus 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 Pacer Metarus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and Pacer Metarus.
Diversification Opportunities for Direxion Daily and Pacer Metarus
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Direxion and Pacer is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily South and Pacer Metarus Nasdaq in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Metarus Nasdaq 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 South are associated (or correlated) with Pacer Metarus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Metarus Nasdaq has no effect on the direction of Direxion Daily i.e., Direxion Daily and Pacer Metarus go up and down completely randomly.
Pair Corralation between Direxion Daily and Pacer Metarus
Given the investment horizon of 90 days Direxion Daily South is expected to generate 5.59 times more return on investment than Pacer Metarus. However, Direxion Daily is 5.59 times more volatile than Pacer Metarus Nasdaq. It trades about 0.19 of its potential returns per unit of risk. Pacer Metarus Nasdaq is currently generating about 0.13 per unit of risk. If you would invest 8,089 in Direxion Daily South on September 3, 2025 and sell it today you would earn a total of 6,114 from holding Direxion Daily South or generate 75.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Direxion Daily South vs. Pacer Metarus Nasdaq
Performance |
| Timeline |
| Direxion Daily South |
| Pacer Metarus Nasdaq |
Direxion Daily and Pacer Metarus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Daily and Pacer Metarus
The main advantage of trading using opposite Direxion Daily and Pacer Metarus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, Pacer Metarus 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 Pacer Metarus will offset losses from the drop in Pacer Metarus' long position.| Direxion Daily vs. Strategy Shares | Direxion Daily vs. Freedom Day Dividend | Direxion Daily vs. Franklin Templeton ETF | Direxion Daily vs. iShares MSCI China |
| Pacer Metarus vs. JPMorgan Equity Premium | Pacer Metarus vs. Global X SP | Pacer Metarus vs. Amplify CWP Enhanced | Pacer Metarus vs. Global X Russell |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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