Correlation Between Direxion Daily and Dividend Growth

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

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

Diversification Opportunities for Direxion Daily and Dividend Growth

-0.96

Correlation Coefficient

Direxion Daily  Dividend Growth

Pay attention - limited upside

The 3 months correlation between Direxion and Dividend is -0.96. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Semiconductor and Dividend Growth Split in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dividend Growth Split 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 Semiconductor are associated (or correlated) with Dividend Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dividend Growth Split has no effect on the direction of Direxion Daily i.e., Direxion Daily and Dividend Growth go up and down completely randomly.

Pair Corralation between Direxion Daily and Dividend Growth

Given the investment horizon of 90 days Direxion Daily Semiconductor is expected to under-perform the Dividend Growth. In addition to that, Direxion Daily is 9.11 times more volatile than Dividend Growth Split. It trades about -0.22 of its total potential returns per unit of risk. Dividend Growth Split is currently generating about 0.39 per unit of volatility. If you would invest  614.00  in Dividend Growth Split on May 4, 2025 and sell it today you would earn a total of  89.00  from holding Dividend Growth Split or generate 14.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Direxion Daily Semiconductor  vs.  Dividend Growth Split

Direxion Daily Semic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Direxion Daily Semiconductor has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Etf's basic indicators remain comparatively stable which may send shares a bit higher in September 2025. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.

Dividend Growth Split

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Dividend Growth Split are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Dividend Growth displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Direxion Daily and Dividend Growth

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

The idea behind Direxion Daily Semiconductor and Dividend Growth Split 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.