Correlation Between Simplify Exchange and Vanguard

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

Diversification Opportunities for Simplify Exchange and Vanguard

0.9

Correlation Coefficient

Simplify Exchange  Vanguard

Almost no diversification

The 3 months correlation between Simplify and Vanguard is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Simplify Exchange Traded and Vanguard SP Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard SP Small 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 Vanguard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard SP Small has no effect on the direction of Simplify Exchange i.e., Simplify Exchange and Vanguard go up and down completely randomly.

Pair Corralation between Simplify Exchange and Vanguard

Considering the 90-day investment horizon Simplify Exchange Traded is expected to generate 1.36 times more return on investment than Vanguard. However, Simplify Exchange is 1.36 times more volatile than Vanguard SP Small Cap. It trades about 0.18 of its potential returns per unit of risk. Vanguard SP Small Cap is currently generating about 0.13 per unit of risk. If you would invest  2,853  in Simplify Exchange Traded on May 21, 2025 and sell it today you would earn a total of  448.00  from holding Simplify Exchange Traded or generate 15.7% return on investment over 90 days.

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

Simplify Exchange Traded  vs.  Vanguard SP Small Cap

Simplify Exchange Traded

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Simplify Exchange Traded are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Simplify Exchange unveiled solid returns over the last few months and may actually be approaching a breakup point.

Vanguard SP Small

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard SP Small Cap are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, Vanguard may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Simplify Exchange and Vanguard

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

The idea behind Simplify Exchange Traded and Vanguard SP Small Cap 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.