Correlation Between IShares International and Simplify Interest

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

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

Diversification Opportunities for IShares International and Simplify Interest

-0.43

Correlation Coefficient

IShares International  Simplify Interest

Very good diversification

The 3 months correlation between IShares and Simplify is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding iShares International Treasury and Simplify Interest Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simplify Interest Rate and IShares International 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 iShares International Treasury are associated (or correlated) with Simplify Interest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simplify Interest Rate has no effect on the direction of IShares International i.e., IShares International and Simplify Interest go up and down completely randomly.

Pair Corralation between IShares International and Simplify Interest

Given the investment horizon of 90 days IShares International is expected to generate 8.26 times less return on investment than Simplify Interest. But when comparing it to its historical volatility, iShares International Treasury is 4.15 times less risky than Simplify Interest. It trades about 0.03 of its potential returns per unit of risk. Simplify Interest Rate is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  5,284  in Simplify Interest Rate on May 1, 2025 and sell it today you would earn a total of  359.00  from holding Simplify Interest Rate or generate 6.79% return on investment over 90 days.

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

iShares International Treasury  vs.  Simplify Interest Rate

iShares International

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in iShares International Treasury are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, IShares International is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Simplify Interest Rate

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Simplify Interest Rate are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting forward indicators, Simplify Interest may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with IShares International and Simplify Interest

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

The idea behind iShares International Treasury and Simplify Interest Rate 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.