Correlation Between Strategy Shares and Simplify Exchange

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

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

Diversification Opportunities for Strategy Shares and Simplify Exchange

0.91

Correlation Coefficient

Strategy Shares  Simplify Exchange

Almost no diversification

The 3 months correlation between Strategy and Simplify is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Strategy Shares 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 Strategy Shares 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 Strategy Shares 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 Strategy Shares i.e., Strategy Shares and Simplify Exchange go up and down completely randomly.

Pair Corralation between Strategy Shares and Simplify Exchange

Given the investment horizon of 90 days Strategy Shares is expected to generate 1.56 times less return on investment than Simplify Exchange. But when comparing it to its historical volatility, Strategy Shares is 5.29 times less risky than Simplify Exchange. It trades about 0.3 of its potential returns per unit of risk. Simplify Exchange Traded is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  2,586  in Simplify Exchange Traded on July 1, 2025 and sell it today you would earn a total of  89.00  from holding Simplify Exchange Traded or generate 3.44% return on investment over 90 days.

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

Strategy Shares  vs.  Simplify Exchange Traded

Strategy Shares

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Strategy Shares are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Strategy Shares is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Simplify Exchange Traded

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Simplify Exchange Traded are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Simplify Exchange is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Strategy Shares and Simplify Exchange

The main advantage of trading using opposite Strategy Shares and Simplify Exchange positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategy Shares 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 Strategy Shares 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.

Check out your portfolio center.

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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.