Correlation Between Defiance Daily and Direxion Daily

Can any of the company-specific risk be diversified away by investing in both Defiance Daily and Direxion Daily 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 Defiance Daily and Direxion Daily into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Defiance Daily Target and Direxion Daily CSCO, you can compare the effects of market volatilities on Defiance Daily and Direxion Daily 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 Defiance Daily with a short position of Direxion Daily. Check out your portfolio center. Please also check ongoing floating volatility patterns of Defiance Daily and Direxion Daily.

Diversification Opportunities for Defiance Daily and Direxion Daily

-0.06

Correlation Coefficient

Defiance Daily  Direxion Daily

Good diversification

The 3 months correlation between Defiance and Direxion is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Defiance Daily Target and Direxion Daily CSCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direxion Daily CSCO and Defiance 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 Defiance Daily Target are associated (or correlated) with Direxion Daily. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direxion Daily CSCO has no effect on the direction of Defiance Daily i.e., Defiance Daily and Direxion Daily go up and down completely randomly.

Pair Corralation between Defiance Daily and Direxion Daily

Given the investment horizon of 90 days Defiance Daily Target is expected to generate 307.58 times more return on investment than Direxion Daily. However, Defiance Daily is 307.58 times more volatile than Direxion Daily CSCO. It trades about 0.33 of its potential returns per unit of risk. Direxion Daily CSCO is currently generating about -0.14 per unit of risk. If you would invest  0.00  in Defiance Daily Target on May 13, 2025 and sell it today you would earn a total of  1,715  from holding Defiance Daily Target or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	27.27%
Values	Daily Returns

Defiance Daily Target  vs.  Direxion Daily CSCO

Defiance Daily Target

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Defiance Daily Target are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Defiance Daily showed solid returns over the last few months and may actually be approaching a breakup point.

Direxion Daily CSCO

Risk-Adjusted Performance

Weakest

Over the last 90 days Direxion Daily CSCO has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Etf's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

Pair Trading with Defiance Daily and Direxion Daily

The main advantage of trading using opposite Defiance Daily and Direxion Daily positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Defiance Daily position performs unexpectedly, Direxion Daily 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 Daily will offset losses from the drop in Direxion Daily's long position.

The idea behind Defiance Daily Target and Direxion Daily CSCO pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Valuation module to check real value of public entities based on technical and fundamental data.