Correlation Between ETF Series and Direxion Daily

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

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

Diversification Opportunities for ETF Series and Direxion Daily

-0.19

Correlation Coefficient

ETF Series  Direxion Daily

Good diversification

The 3 months correlation between ETF and Direxion is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding ETF Series Solutions and Direxion Daily CSI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direxion Daily CSI and ETF Series 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 ETF Series Solutions 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 CSI has no effect on the direction of ETF Series i.e., ETF Series and Direxion Daily go up and down completely randomly.

Pair Corralation between ETF Series and Direxion Daily

Given the investment horizon of 90 days ETF Series is expected to generate 2.26 times less return on investment than Direxion Daily. But when comparing it to its historical volatility, ETF Series Solutions is 4.28 times less risky than Direxion Daily. It trades about 0.09 of its potential returns per unit of risk. Direxion Daily CSI is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  3,353  in Direxion Daily CSI on September 11, 2025 and sell it today you would earn a total of  1,014  from holding Direxion Daily CSI or generate 30.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

ETF Series Solutions  vs.  Direxion Daily CSI

ETF Series Solutions

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in ETF Series Solutions are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, ETF Series is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Direxion Daily CSI

Risk-Adjusted Performance

Weakest

Over the last 90 days Direxion Daily CSI has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Etf's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in January 2026. The current disturbance may also be a sign of long term up-swing for the ETF investors.

Pair Trading with ETF Series and Direxion Daily

The main advantage of trading using opposite ETF Series and Direxion Daily positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETF Series 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 ETF Series Solutions and Direxion Daily CSI 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.