Correlation Between Direxion Daily and Matrix

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

Diversification Opportunities for Direxion Daily and Matrix

-0.84

Correlation Coefficient

Direxion Daily  Matrix

Pay attention - limited upside

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

Pair Corralation between Direxion Daily and Matrix

Given the investment horizon of 90 days Direxion Daily Semiconductor is expected to under-perform the Matrix. In addition to that, Direxion Daily is 2.55 times more volatile than Matrix. It trades about -0.29 of its total potential returns per unit of risk. Matrix is currently generating about 0.37 per unit of volatility. If you would invest  887,707  in Matrix on May 1, 2025 and sell it today you would earn a total of  360,293  from holding Matrix or generate 40.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	80.33%
Values	Daily Returns

Direxion Daily Semiconductor  vs.  Matrix

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.

Matrix

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Matrix are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Matrix sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Direxion Daily and Matrix

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

The idea behind Direxion Daily Semiconductor and Matrix 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.