Correlation Between Direxion Daily and First National

Can any of the company-specific risk be diversified away by investing in both Direxion Daily and First National 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 First National 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 First National Energy, you can compare the effects of market volatilities on Direxion Daily and First National 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 First National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and First National.

Diversification Opportunities for Direxion Daily and First National

0.36

Correlation Coefficient

Direxion Daily  First National

Weak diversification

The 3 months correlation between Direxion and First is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Semiconductor and First National Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First National Energy 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 First National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First National Energy has no effect on the direction of Direxion Daily i.e., Direxion Daily and First National go up and down completely randomly.

Pair Corralation between Direxion Daily and First National

Given the investment horizon of 90 days Direxion Daily Semiconductor is expected to under-perform the First National. In addition to that, Direxion Daily is 1.3 times more volatile than First National Energy. It trades about -0.29 of its total potential returns per unit of risk. First National Energy is currently generating about -0.15 per unit of volatility. If you would invest  6.00  in First National Energy on May 1, 2025 and sell it today you would lose (2.00) from holding First National Energy or give up 33.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.83%
Values	Daily Returns

Direxion Daily Semiconductor  vs.  First National Energy

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 August 2025. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.

First National Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days First National Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical and fundamental 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 firm shareholders.

Pair Trading with Direxion Daily and First National

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

The idea behind Direxion Daily Semiconductor and First National Energy 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.