Correlation Between Direxion Daily and Fundamental Income

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

Diversification Opportunities for Direxion Daily and Fundamental Income

-0.65

Correlation Coefficient

Direxion Daily  Fundamental Income

Excellent diversification

The 3 months correlation between Direxion and Fundamental is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Semiconductor and Fundamental Income Net in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fundamental Income Net 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 Fundamental Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fundamental Income Net has no effect on the direction of Direxion Daily i.e., Direxion Daily and Fundamental Income go up and down completely randomly.

Pair Corralation between Direxion Daily and Fundamental Income

Given the investment horizon of 90 days Direxion Daily Semiconductor is expected to under-perform the Fundamental Income. In addition to that, Direxion Daily is 4.52 times more volatile than Fundamental Income Net. It trades about -0.14 of its total potential returns per unit of risk. Fundamental Income Net is currently generating about 0.04 per unit of volatility. If you would invest  2,346  in Fundamental Income Net on May 13, 2025 and sell it today you would earn a total of  49.00  from holding Fundamental Income Net or generate 2.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Direxion Daily Semiconductor  vs.  Fundamental Income Net

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.

Fundamental Income Net

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Fundamental Income Net are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Fundamental Income is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Direxion Daily and Fundamental Income

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

The idea behind Direxion Daily Semiconductor and Fundamental Income Net 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.