Correlation Between Simplify Exchange and ProShares Merger

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

By analyzing existing cross correlation between Simplify Exchange Traded and ProShares Merger ETF, you can compare the effects of market volatilities on Simplify Exchange and ProShares Merger 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 Simplify Exchange with a short position of ProShares Merger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simplify Exchange and ProShares Merger.

Diversification Opportunities for Simplify Exchange and ProShares Merger

0.83

Correlation Coefficient

Simplify Exchange  ProShares Merger

Very poor diversification

The 3 months correlation between Simplify and ProShares is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Simplify Exchange Traded and ProShares Merger ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Merger ETF and Simplify Exchange 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 Simplify Exchange Traded are associated (or correlated) with ProShares Merger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Merger ETF has no effect on the direction of Simplify Exchange i.e., Simplify Exchange and ProShares Merger go up and down completely randomly.

Pair Corralation between Simplify Exchange and ProShares Merger

Considering the 90-day investment horizon Simplify Exchange Traded is expected to generate 15.3 times more return on investment than ProShares Merger. However, Simplify Exchange is 15.3 times more volatile than ProShares Merger ETF. It trades about 0.13 of its potential returns per unit of risk. ProShares Merger ETF is currently generating about 0.35 per unit of risk. If you would invest  2,718  in Simplify Exchange Traded on May 3, 2025 and sell it today you would earn a total of  316.00  from holding Simplify Exchange Traded or generate 11.63% return on investment over 90 days.

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

Simplify Exchange Traded  vs.  ProShares Merger ETF

Simplify Exchange Traded

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Simplify Exchange Traded are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Simplify Exchange may actually be approaching a critical reversion point that can send shares even higher in September 2025.

ProShares Merger ETF

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares Merger ETF are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, ProShares Merger is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Simplify Exchange and ProShares Merger

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

The idea behind Simplify Exchange Traded and ProShares Merger ETF 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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.