Correlation Between FlexShares Real and Simplify Interest

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

By analyzing existing cross correlation between FlexShares Real Assets and Simplify Interest Rate, you can compare the effects of market volatilities on FlexShares Real and Simplify Interest 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 FlexShares Real with a short position of Simplify Interest. Check out your portfolio center. Please also check ongoing floating volatility patterns of FlexShares Real and Simplify Interest.

Diversification Opportunities for FlexShares Real and Simplify Interest

-0.32

Correlation Coefficient

FlexShares Real  Simplify Interest

Very good diversification

The 3 months correlation between FlexShares and Simplify is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding FlexShares Real Assets and Simplify Interest Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simplify Interest Rate and FlexShares Real 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 FlexShares Real Assets are associated (or correlated) with Simplify Interest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simplify Interest Rate has no effect on the direction of FlexShares Real i.e., FlexShares Real and Simplify Interest go up and down completely randomly.

Pair Corralation between FlexShares Real and Simplify Interest

Given the investment horizon of 90 days FlexShares Real Assets is expected to generate 0.26 times more return on investment than Simplify Interest. However, FlexShares Real Assets is 3.85 times less risky than Simplify Interest. It trades about 0.1 of its potential returns per unit of risk. Simplify Interest Rate is currently generating about -0.02 per unit of risk. If you would invest  3,177  in FlexShares Real Assets on May 15, 2025 and sell it today you would earn a total of  120.00  from holding FlexShares Real Assets or generate 3.78% return on investment over 90 days.

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

FlexShares Real Assets  vs.  Simplify Interest Rate

FlexShares Real Assets

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in FlexShares Real Assets are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, FlexShares Real is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Simplify Interest Rate

Risk-Adjusted Performance

Weakest

Over the last 90 days Simplify Interest Rate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, Simplify Interest is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with FlexShares Real and Simplify Interest

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

The idea behind FlexShares Real Assets and Simplify Interest Rate 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..