Correlation Between Simplify Macro and Paysafe

Can any of the company-specific risk be diversified away by investing in both Simplify Macro and Paysafe 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 Paysafe 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 Paysafe, you can compare the effects of market volatilities on Simplify Macro and Paysafe 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 Paysafe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simplify Macro and Paysafe.

Diversification Opportunities for Simplify Macro and Paysafe

0.26

Correlation Coefficient

Simplify Macro  Paysafe

Modest diversification

The 3 months correlation between Simplify and Paysafe is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Simplify Macro Strategy and Paysafe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paysafe 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 Paysafe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paysafe has no effect on the direction of Simplify Macro i.e., Simplify Macro and Paysafe go up and down completely randomly.

Pair Corralation between Simplify Macro and Paysafe

Considering the 90-day investment horizon Simplify Macro Strategy is expected to generate 0.26 times more return on investment than Paysafe. However, Simplify Macro Strategy is 3.83 times less risky than Paysafe. It trades about 0.07 of its potential returns per unit of risk. Paysafe is currently generating about -0.03 per unit of risk. If you would invest  2,115  in Simplify Macro Strategy on January 27, 2025 and sell it today you would earn a total of  129.00  from holding Simplify Macro Strategy or generate 6.1% return on investment over 90 days.

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

Simplify Macro Strategy  vs.  Paysafe

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 inconsistent forward indicators, Simplify Macro may actually be approaching a critical reversion point that can send shares even higher in May 2025.

Paysafe

Risk-Adjusted Performance

Very Weak

Over the last 90 days Paysafe has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Simplify Macro and Paysafe

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

The idea behind Simplify Macro Strategy and Paysafe 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.