Correlation Between Direxion and WisdomTree BioRevolution
Can any of the company-specific risk be diversified away by investing in both Direxion and WisdomTree BioRevolution 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 and WisdomTree BioRevolution into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Direxion and WisdomTree BioRevolution, you can compare the effects of market volatilities on Direxion and WisdomTree BioRevolution 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 with a short position of WisdomTree BioRevolution. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion and WisdomTree BioRevolution.
Diversification Opportunities for Direxion and WisdomTree BioRevolution
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Direxion and WisdomTree is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Direxion and WisdomTree BioRevolution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree BioRevolution and Direxion 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 are associated (or correlated) with WisdomTree BioRevolution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree BioRevolution has no effect on the direction of Direxion i.e., Direxion and WisdomTree BioRevolution go up and down completely randomly.
Pair Corralation between Direxion and WisdomTree BioRevolution
Given the investment horizon of 90 days Direxion is expected to generate 1.47 times more return on investment than WisdomTree BioRevolution. However, Direxion is 1.47 times more volatile than WisdomTree BioRevolution. It trades about 0.12 of its potential returns per unit of risk. WisdomTree BioRevolution is currently generating about 0.05 per unit of risk. If you would invest 3,126 in Direxion on October 9, 2025 and sell it today you would earn a total of 144.00 from holding Direxion or generate 4.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 27.87% |
| Values | Daily Returns |
Direxion vs. WisdomTree BioRevolution
Performance |
| Timeline |
| Direxion |
Risk-Adjusted Performance
Fair
Weak | Strong |
| WisdomTree BioRevolution |
Direxion and WisdomTree BioRevolution Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direxion and WisdomTree BioRevolution
The main advantage of trading using opposite Direxion and WisdomTree BioRevolution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion position performs unexpectedly, WisdomTree BioRevolution 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 WisdomTree BioRevolution will offset losses from the drop in WisdomTree BioRevolution's long position.| Direxion vs. WisdomTree BioRevolution | Direxion vs. Themes Cash Flow | Direxion vs. Global X SP | Direxion vs. ETF Managers Group |
| WisdomTree BioRevolution vs. Global X SP | WisdomTree BioRevolution vs. Themes Cash Flow | WisdomTree BioRevolution vs. ETF Managers Group | WisdomTree BioRevolution vs. VanEck ETF Trust |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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