Correlation Between Main International and Simplify Exchange

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

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

Diversification Opportunities for Main International and Simplify Exchange

0.92

Correlation Coefficient

Main International  Simplify Exchange

Almost no diversification

The 3 months correlation between Main and Simplify is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Main International ETF and Simplify Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simplify Exchange Traded and Main 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 Main International ETF are associated (or correlated) with Simplify Exchange. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simplify Exchange Traded has no effect on the direction of Main International i.e., Main International and Simplify Exchange go up and down completely randomly.

Pair Corralation between Main International and Simplify Exchange

Given the investment horizon of 90 days Main International is expected to generate 1.67 times less return on investment than Simplify Exchange. But when comparing it to its historical volatility, Main International ETF is 2.35 times less risky than Simplify Exchange. It trades about 0.28 of its potential returns per unit of risk. Simplify Exchange Traded is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  2,639  in Simplify Exchange Traded on April 26, 2025 and sell it today you would earn a total of  499.00  from holding Simplify Exchange Traded or generate 18.91% return on investment over 90 days.

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

Main International ETF  vs.  Simplify Exchange Traded

Main International ETF

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Main International ETF are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, Main International may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Simplify Exchange Traded

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Simplify Exchange Traded are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Simplify Exchange unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Main International and Simplify Exchange

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

The idea behind Main International ETF and Simplify Exchange Traded 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.