Correlation Between Cornerstone Strategic and Simplify Managed

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

By analyzing existing cross correlation between Cornerstone Strategic Value and Simplify Managed Futures, you can compare the effects of market volatilities on Cornerstone Strategic and Simplify Managed 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 Cornerstone Strategic with a short position of Simplify Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cornerstone Strategic and Simplify Managed.

Diversification Opportunities for Cornerstone Strategic and Simplify Managed

0.22

Correlation Coefficient

Cornerstone Strategic  Simplify Managed

Modest diversification

The 3 months correlation between Cornerstone and Simplify is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Cornerstone Strategic Value and Simplify Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simplify Managed Futures and Cornerstone Strategic 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 Cornerstone Strategic Value are associated (or correlated) with Simplify Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simplify Managed Futures has no effect on the direction of Cornerstone Strategic i.e., Cornerstone Strategic and Simplify Managed go up and down completely randomly.

Pair Corralation between Cornerstone Strategic and Simplify Managed

Considering the 90-day investment horizon Cornerstone Strategic Value is expected to generate 0.98 times more return on investment than Simplify Managed. However, Cornerstone Strategic Value is 1.02 times less risky than Simplify Managed. It trades about 0.33 of its potential returns per unit of risk. Simplify Managed Futures is currently generating about -0.03 per unit of risk. If you would invest  675.00  in Cornerstone Strategic Value on May 8, 2025 and sell it today you would earn a total of  129.00  from holding Cornerstone Strategic Value or generate 19.11% return on investment over 90 days.

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

Cornerstone Strategic Value  vs.  Simplify Managed Futures

Cornerstone Strategic

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cornerstone Strategic Value are ranked lower than 25 (%) of all funds and portfolios of funds over the last 90 days. In spite of very weak essential indicators, Cornerstone Strategic displayed solid returns over the last few months and may actually be approaching a breakup point.

Simplify Managed Futures

Risk-Adjusted Performance

Weakest

Over the last 90 days Simplify Managed Futures has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Simplify Managed is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cornerstone Strategic and Simplify Managed

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

The idea behind Cornerstone Strategic Value and Simplify Managed Futures 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.