Correlation Between Exxon and Direxion Daily

Can any of the company-specific risk be diversified away by investing in both Exxon and Direxion Daily 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 Exxon and Direxion Daily into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Exxon Mobil Corp and Direxion Daily SP, you can compare the effects of market volatilities on Exxon and Direxion Daily 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 Exxon with a short position of Direxion Daily. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Direxion Daily.

Diversification Opportunities for Exxon and Direxion Daily

-0.74

Correlation Coefficient

Exxon  Direxion Daily

Pay attention - limited upside

The 3 months correlation between Exxon and Direxion is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Direxion Daily SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direxion Daily SP and Exxon 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 Exxon Mobil Corp are associated (or correlated) with Direxion Daily. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direxion Daily SP has no effect on the direction of Exxon i.e., Exxon and Direxion Daily go up and down completely randomly.

Pair Corralation between Exxon and Direxion Daily

Considering the 90-day investment horizon Exxon Mobil Corp is expected to generate 0.43 times more return on investment than Direxion Daily. However, Exxon Mobil Corp is 2.31 times less risky than Direxion Daily. It trades about 0.08 of its potential returns per unit of risk. Direxion Daily SP is currently generating about -0.13 per unit of risk. If you would invest  10,524  in Exxon Mobil Corp on May 2, 2025 and sell it today you would earn a total of  666.00  from holding Exxon Mobil Corp or generate 6.33% return on investment over 90 days.

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

Exxon Mobil Corp  vs.  Direxion Daily SP

Exxon Mobil Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Exxon Mobil Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Exxon may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Direxion Daily SP

Risk-Adjusted Performance

Very Weak

Over the last 90 days Direxion Daily SP has generated negative risk-adjusted returns adding no value to investors with long positions. Even with abnormal performance in the last few months, the Etf's forward indicators remain relatively invariable which may send shares a bit higher in August 2025. The latest agitation may also be a sign of long-running up-swing for the ETF retail investors.

Pair Trading with Exxon and Direxion Daily

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

The idea behind Exxon Mobil Corp and Direxion Daily SP 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.