Correlation Between IShares Trust and Simplify Next

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

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

Diversification Opportunities for IShares Trust and Simplify Next

0.9

Correlation Coefficient

IShares Trust  Simplify Next

Almost no diversification

The 3 months correlation between IShares and Simplify is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and Simplify Next Intangible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simplify Next Intangible and IShares Trust 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 Trust are associated (or correlated) with Simplify Next. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simplify Next Intangible has no effect on the direction of IShares Trust i.e., IShares Trust and Simplify Next go up and down completely randomly.

Pair Corralation between IShares Trust and Simplify Next

Given the investment horizon of 90 days iShares Trust is expected to generate 0.63 times more return on investment than Simplify Next. However, iShares Trust is 1.6 times less risky than Simplify Next. It trades about 0.27 of its potential returns per unit of risk. Simplify Next Intangible is currently generating about 0.13 per unit of risk. If you would invest  3,150  in iShares Trust on May 21, 2025 and sell it today you would earn a total of  244.00  from holding iShares Trust or generate 7.75% return on investment over 90 days.

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

iShares Trust  vs.  Simplify Next Intangible

iShares Trust

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Trust are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal fundamental indicators, IShares Trust may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Simplify Next Intangible

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Simplify Next Intangible are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Simplify Next is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with IShares Trust and Simplify Next

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

The idea behind iShares Trust and Simplify Next Intangible 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.