Correlation Between Direxion Daily and Icon Equity

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

Diversification Opportunities for Direxion Daily and Icon Equity

-0.84

Correlation Coefficient

Direxion Daily  Icon Equity

Pay attention - limited upside

The 3 months correlation between Direxion and Icon is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Semiconductor and Icon Equity Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Equity Income 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 Icon Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Equity Income has no effect on the direction of Direxion Daily i.e., Direxion Daily and Icon Equity go up and down completely randomly.

Pair Corralation between Direxion Daily and Icon Equity

Given the investment horizon of 90 days Direxion Daily Semiconductor is expected to under-perform the Icon Equity. In addition to that, Direxion Daily is 5.95 times more volatile than Icon Equity Income. It trades about -0.3 of its total potential returns per unit of risk. Icon Equity Income is currently generating about 0.13 per unit of volatility. If you would invest  1,555  in Icon Equity Income on May 1, 2025 and sell it today you would earn a total of  105.00  from holding Icon Equity Income or generate 6.75% return on investment over 90 days.

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

Direxion Daily Semiconductor  vs.  Icon Equity Income

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.

Icon Equity Income

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Icon Equity Income are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Icon Equity may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Direxion Daily and Icon Equity

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

The idea behind Direxion Daily Semiconductor and Icon Equity Income 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.

Check out your portfolio center.

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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.