Correlation Between Direxion Daily and K Bro

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

Diversification Opportunities for Direxion Daily and K Bro

-0.28

Correlation Coefficient

Direxion Daily  K Bro

Very good diversification

The 3 months correlation between Direxion and KBRLF is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Semiconductor and K Bro Linen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K Bro Linen 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 K Bro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K Bro Linen has no effect on the direction of Direxion Daily i.e., Direxion Daily and K Bro go up and down completely randomly.

Pair Corralation between Direxion Daily and K Bro

Given the investment horizon of 90 days Direxion Daily Semiconductor is expected to under-perform the K Bro. In addition to that, Direxion Daily is 6.12 times more volatile than K Bro Linen. It trades about -0.2 of its total potential returns per unit of risk. K Bro Linen is currently generating about -0.11 per unit of volatility. If you would invest  2,535  in K Bro Linen on May 16, 2025 and sell it today you would lose (99.00) from holding K Bro Linen or give up 3.91% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	78.69%
Values	Daily Returns

Direxion Daily Semiconductor  vs.  K Bro Linen

Direxion Daily Semic

Risk-Adjusted Performance

Weakest

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.

K Bro Linen

Risk-Adjusted Performance

Weakest

Over the last 90 days K Bro Linen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, K Bro is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Direxion Daily and K Bro

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

The idea behind Direxion Daily Semiconductor and K Bro Linen 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.