Correlation Between Direxion Daily and Collaborative Investment
Can any of the company-specific risk be diversified away by investing in both Direxion Daily and Collaborative Investment 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 Collaborative Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Direxion Daily Pharmaceutical and Collaborative Investment Series, you can compare the effects of market volatilities on Direxion Daily and Collaborative Investment 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 Collaborative Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and Collaborative Investment.
Diversification Opportunities for Direxion Daily and Collaborative Investment
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Direxion and Collaborative is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Pharmaceutical and Collaborative Investment Serie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collaborative Investment 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 Pharmaceutical are associated (or correlated) with Collaborative Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collaborative Investment has no effect on the direction of Direxion Daily i.e., Direxion Daily and Collaborative Investment go up and down completely randomly.
Pair Corralation between Direxion Daily and Collaborative Investment
Given the investment horizon of 90 days Direxion Daily Pharmaceutical is expected to generate 3.69 times more return on investment than Collaborative Investment. However, Direxion Daily is 3.69 times more volatile than Collaborative Investment Series. It trades about 0.05 of its potential returns per unit of risk. Collaborative Investment Series is currently generating about 0.04 per unit of risk. If you would invest 765.00 in Direxion Daily Pharmaceutical on September 25, 2025 and sell it today you would earn a total of 494.00 from holding Direxion Daily Pharmaceutical or generate 64.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Direxion Daily Pharmaceutical vs. Collaborative Investment Serie
Performance |
| Timeline |
| Direxion Daily Pharm |
| Collaborative Investment |
Direxion Daily and Collaborative Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion Daily and Collaborative Investment
The main advantage of trading using opposite Direxion Daily and Collaborative Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, Collaborative Investment 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 Collaborative Investment will offset losses from the drop in Collaborative Investment's long position.| Direxion Daily vs. KraneShares Trust | Direxion Daily vs. Collaborative Investment Series | Direxion Daily vs. ProShares Merger ETF | Direxion Daily vs. TrueShares Structured Outcome |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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