Correlation Between Direxion Daily and Neuberger Berman

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

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

Diversification Opportunities for Direxion Daily and Neuberger Berman

0.68

Correlation Coefficient

Direxion Daily  Neuberger Berman

Poor diversification

The 3 months correlation between Direxion and Neuberger is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily MSCI and Neuberger Berman ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman ETF 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 MSCI are associated (or correlated) with Neuberger Berman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neuberger Berman ETF has no effect on the direction of Direxion Daily i.e., Direxion Daily and Neuberger Berman go up and down completely randomly.

Pair Corralation between Direxion Daily and Neuberger Berman

Given the investment horizon of 90 days Direxion Daily MSCI is expected to generate 8.86 times more return on investment than Neuberger Berman. However, Direxion Daily is 8.86 times more volatile than Neuberger Berman ETF. It trades about 0.1 of its potential returns per unit of risk. Neuberger Berman ETF is currently generating about 0.26 per unit of risk. If you would invest  1,386  in Direxion Daily MSCI on May 3, 2025 and sell it today you would earn a total of  245.00  from holding Direxion Daily MSCI or generate 17.68% return on investment over 90 days.

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

Direxion Daily MSCI  vs.  Neuberger Berman ETF

Direxion Daily MSCI

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Direxion Daily MSCI are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Direxion Daily showed solid returns over the last few months and may actually be approaching a breakup point.

Neuberger Berman ETF

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Neuberger Berman ETF are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Neuberger Berman is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Direxion Daily and Neuberger Berman

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

The idea behind Direxion Daily MSCI and Neuberger Berman ETF 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.