Correlation Between Core Alternative and Simplify Exchange

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

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

Diversification Opportunities for Core Alternative and Simplify Exchange

-0.85

Correlation Coefficient

Core Alternative  Simplify Exchange

Pay attention - limited upside

The 3 months correlation between Core and Simplify is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Core Alternative ETF and Simplify Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simplify Exchange Traded and Core Alternative 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 Core Alternative ETF are associated (or correlated) with Simplify Exchange. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simplify Exchange Traded has no effect on the direction of Core Alternative i.e., Core Alternative and Simplify Exchange go up and down completely randomly.

Pair Corralation between Core Alternative and Simplify Exchange

Given the investment horizon of 90 days Core Alternative ETF is expected to under-perform the Simplify Exchange. In addition to that, Core Alternative is 1.48 times more volatile than Simplify Exchange Traded. It trades about -0.18 of its total potential returns per unit of risk. Simplify Exchange Traded is currently generating about 0.25 per unit of volatility. If you would invest  3,007  in Simplify Exchange Traded on July 3, 2025 and sell it today you would earn a total of  111.00  from holding Simplify Exchange Traded or generate 3.69% return on investment over 90 days.

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

Core Alternative ETF  vs.  Simplify Exchange Traded

Core Alternative ETF

Risk-Adjusted Performance

Weakest

Over the last 90 days Core Alternative ETF has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Core Alternative is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Simplify Exchange Traded

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Simplify Exchange Traded are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Simplify Exchange is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Core Alternative and Simplify Exchange

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

The idea behind Core Alternative ETF and Simplify Exchange Traded 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.