Correlation Between Simplify Macro and IShares MSCI

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

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

Diversification Opportunities for Simplify Macro and IShares MSCI

0.0

Correlation Coefficient

Simplify Macro  IShares MSCI

Pay attention - limited upside

The 3 months correlation between Simplify and IShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Simplify Macro Strategy and iShares MSCI Eurozone in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Eurozone and Simplify Macro 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 Macro Strategy are associated (or correlated) with IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI Eurozone has no effect on the direction of Simplify Macro i.e., Simplify Macro and IShares MSCI go up and down completely randomly.

Pair Corralation between Simplify Macro and IShares MSCI

If you would invest  2,148  in Simplify Macro Strategy on February 3, 2025 and sell it today you would earn a total of  114.00  from holding Simplify Macro Strategy or generate 5.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Simplify Macro Strategy  vs.  iShares MSCI Eurozone

Simplify Macro Strategy

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Simplify Macro Strategy are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable forward indicators, Simplify Macro is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

iShares MSCI Eurozone

Risk-Adjusted Performance

OK

Over the last 90 days iShares MSCI Eurozone has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, IShares MSCI is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Simplify Macro and IShares MSCI

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

The idea behind Simplify Macro Strategy and iShares MSCI Eurozone 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.