Correlation Between Simplify Asset and IShares MSCI

Can any of the company-specific risk be diversified away by investing in both Simplify Asset 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 Asset 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 Asset Management and iShares MSCI World, you can compare the effects of market volatilities on Simplify Asset 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 Asset with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simplify Asset and IShares MSCI.

Diversification Opportunities for Simplify Asset and IShares MSCI

0.74

Correlation Coefficient

Simplify Asset  IShares MSCI

Poor diversification

The 3 months correlation between Simplify and IShares is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Simplify Asset Management and iShares MSCI World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI World 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 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 World has no effect on the direction of Simplify Asset i.e., Simplify Asset and IShares MSCI go up and down completely randomly.

Pair Corralation between Simplify Asset and IShares MSCI

Considering the 90-day investment horizon Simplify Asset Management is expected to generate 1.42 times more return on investment than IShares MSCI. However, Simplify Asset is 1.42 times more volatile than iShares MSCI World. It trades about 0.25 of its potential returns per unit of risk. iShares MSCI World is currently generating about 0.29 per unit of risk. If you would invest  2,230  in Simplify Asset Management on April 27, 2025 and sell it today you would earn a total of  153.00  from holding Simplify Asset Management or generate 6.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	40.32%
Values	Daily Returns

Simplify Asset Management  vs.  iShares MSCI World

Simplify Asset Management

Risk-Adjusted Performance

Solid

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.

iShares MSCI World

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares MSCI World are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal primary indicators, IShares MSCI disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Simplify Asset and IShares MSCI

The main advantage of trading using opposite Simplify Asset and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simplify Asset 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 Asset Management and iShares MSCI World 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.