Correlation Between Simplify Exchange and Vanguard FTSE

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

Diversification Opportunities for Simplify Exchange and Vanguard FTSE

0.79

Correlation Coefficient

Simplify Exchange  Vanguard FTSE

Poor diversification

The 3 months correlation between Simplify and Vanguard is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Simplify Exchange Traded and Vanguard FTSE Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard FTSE Pacific 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 FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard FTSE Pacific has no effect on the direction of Simplify Exchange i.e., Simplify Exchange and Vanguard FTSE go up and down completely randomly.

Pair Corralation between Simplify Exchange and Vanguard FTSE

Considering the 90-day investment horizon Simplify Exchange is expected to generate 1.04 times less return on investment than Vanguard FTSE. In addition to that, Simplify Exchange is 1.55 times more volatile than Vanguard FTSE Pacific. It trades about 0.11 of its total potential returns per unit of risk. Vanguard FTSE Pacific is currently generating about 0.18 per unit of volatility. If you would invest  7,713  in Vanguard FTSE Pacific on May 10, 2025 and sell it today you would earn a total of  756.00  from holding Vanguard FTSE Pacific or generate 9.8% return on investment over 90 days.

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

Simplify Exchange Traded  vs.  Vanguard FTSE Pacific

Simplify Exchange Traded

Risk-Adjusted Performance

Weakest

Compared to the overall equity markets, risk-adjusted returns on investments in Simplify Exchange Traded are ranked lower than 8 (%) 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.

Vanguard FTSE Pacific

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard FTSE Pacific are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Vanguard FTSE may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Simplify Exchange and Vanguard FTSE

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

The idea behind Simplify Exchange Traded and Vanguard FTSE Pacific 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.