Correlation Between Simplify Asset and MBIA

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

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

Diversification Opportunities for Simplify Asset and MBIA

0.39

Correlation Coefficient

Simplify Asset  MBIA

Weak diversification

The 3 months correlation between Simplify and MBIA is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Simplify Asset Management and MBIA Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MBIA Inc and Simplify Asset 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 Asset Management are associated (or correlated) with MBIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MBIA Inc has no effect on the direction of Simplify Asset i.e., Simplify Asset and MBIA go up and down completely randomly.

Pair Corralation between Simplify Asset and MBIA

Considering the 90-day investment horizon Simplify Asset Management is expected to generate 0.34 times more return on investment than MBIA. However, Simplify Asset Management is 2.93 times less risky than MBIA. It trades about 0.35 of its potential returns per unit of risk. MBIA Inc is currently generating about 0.08 per unit of risk. If you would invest  2,216  in Simplify Asset Management on May 3, 2025 and sell it today you would earn a total of  167.00  from holding Simplify Asset Management or generate 7.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	32.26%
Values	Daily Returns

Simplify Asset Management  vs.  MBIA Inc

Simplify Asset Management

Risk-Adjusted Performance

Strong

Over the last 90 days Simplify Asset Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly inconsistent forward indicators, Simplify Asset reported solid returns over the last few months and may actually be approaching a breakup point.

MBIA Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MBIA Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady fundamental drivers, MBIA demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Simplify Asset and MBIA

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

The idea behind Simplify Asset Management and MBIA Inc 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.