Correlation Between Direxion Daily and Bitwise Funds

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

By analyzing existing cross correlation between Direxion Daily META and Bitwise Funds Trust, you can compare the effects of market volatilities on Direxion Daily and Bitwise Funds 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 Bitwise Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and Bitwise Funds.

Diversification Opportunities for Direxion Daily and Bitwise Funds

-0.43

Correlation Coefficient

Direxion Daily  Bitwise Funds

Very good diversification

The 3 months correlation between Direxion and Bitwise is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily META and Bitwise Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitwise Funds Trust 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 META are associated (or correlated) with Bitwise Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitwise Funds Trust has no effect on the direction of Direxion Daily i.e., Direxion Daily and Bitwise Funds go up and down completely randomly.

Pair Corralation between Direxion Daily and Bitwise Funds

Given the investment horizon of 90 days Direxion Daily META is expected to under-perform the Bitwise Funds. But the etf apears to be less risky and, when comparing its historical volatility, Direxion Daily META is 1.22 times less risky than Bitwise Funds. The etf trades about -0.18 of its potential returns per unit of risk. The Bitwise Funds Trust is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  4,657  in Bitwise Funds Trust on May 1, 2025 and sell it today you would earn a total of  44.00  from holding Bitwise Funds Trust or generate 0.94% return on investment over 90 days.

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

Direxion Daily META  vs.  Bitwise Funds Trust

Direxion Daily META

Risk-Adjusted Performance

Very Weak

Over the last 90 days Direxion Daily META has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Etf's basic indicators remain rather sound which may send shares a bit higher in August 2025. The latest tumult may also be a sign of longer-term up-swing for the fund shareholders.

Bitwise Funds Trust

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bitwise Funds Trust are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Bitwise Funds is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Direxion Daily and Bitwise Funds

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

The idea behind Direxion Daily META and Bitwise Funds Trust 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.