Correlation Between Voya Index and Direxion Monthly
Can any of the company-specific risk be diversified away by investing in both Voya Index and Direxion Monthly 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 Voya Index and Direxion Monthly into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Index Solution and Direxion Monthly Nasdaq 100, you can compare the effects of market volatilities on Voya Index and Direxion Monthly 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 Voya Index with a short position of Direxion Monthly. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Index and Direxion Monthly.
Diversification Opportunities for Voya Index and Direxion Monthly
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Voya and Direxion is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Voya Index Solution and Direxion Monthly Nasdaq 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direxion Monthly Nasdaq and Voya Index 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 Voya Index Solution are associated (or correlated) with Direxion Monthly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direxion Monthly Nasdaq has no effect on the direction of Voya Index i.e., Voya Index and Direxion Monthly go up and down completely randomly.
Pair Corralation between Voya Index and Direxion Monthly
Assuming the 90 days horizon Voya Index is expected to generate 1.76 times less return on investment than Direxion Monthly. But when comparing it to its historical volatility, Voya Index Solution is 2.27 times less risky than Direxion Monthly. It trades about 0.22 of its potential returns per unit of risk. Direxion Monthly Nasdaq 100 is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 9,200 in Direxion Monthly Nasdaq 100 on June 2, 2025 and sell it today you would earn a total of 1,351 from holding Direxion Monthly Nasdaq 100 or generate 14.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Index Solution vs. Direxion Monthly Nasdaq 100
Performance |
| Timeline |
| Voya Index Solution |
| Direxion Monthly Nasdaq |
Voya Index and Direxion Monthly Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Index and Direxion Monthly
The main advantage of trading using opposite Voya Index and Direxion Monthly positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Index position performs unexpectedly, Direxion Monthly 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 Monthly will offset losses from the drop in Direxion Monthly's long position.| Voya Index vs. Voya Bond Index | Voya Index vs. Voya Bond Index | Voya Index vs. Voya Limited Maturity | Voya Index vs. Voya Limited Maturity |
| Direxion Monthly vs. Direxion Monthly Sp | Direxion Monthly vs. Direxion Monthly Small | Direxion Monthly vs. Nasdaq 100 2x Strategy | Direxion Monthly vs. Nasdaq 100 2x Strategy |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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