Correlation Between IShares GSCI and Simplify Exchange

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

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

Diversification Opportunities for IShares GSCI and Simplify Exchange

-0.06

Correlation Coefficient

IShares GSCI  Simplify Exchange

Good diversification

The 3 months correlation between IShares and Simplify is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding iShares GSCI Commodity 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 IShares GSCI 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 iShares GSCI Commodity 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 IShares GSCI i.e., IShares GSCI and Simplify Exchange go up and down completely randomly.

Pair Corralation between IShares GSCI and Simplify Exchange

Given the investment horizon of 90 days iShares GSCI Commodity is expected to generate 2.29 times more return on investment than Simplify Exchange. However, IShares GSCI is 2.29 times more volatile than Simplify Exchange Traded. It trades about 0.09 of its potential returns per unit of risk. Simplify Exchange Traded is currently generating about 0.04 per unit of risk. If you would invest  2,584  in iShares GSCI Commodity on August 19, 2025 and sell it today you would earn a total of  111.00  from holding iShares GSCI Commodity or generate 4.3% return on investment over 90 days.

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

iShares GSCI Commodity  vs.  Simplify Exchange Traded

iShares GSCI Commodity

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in iShares GSCI Commodity are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable primary indicators, IShares GSCI is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Simplify Exchange Traded

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Simplify Exchange Traded are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Simplify Exchange is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with IShares GSCI and Simplify Exchange

The main advantage of trading using opposite IShares GSCI and Simplify Exchange positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares GSCI 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 iShares GSCI Commodity 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.