Correlation Between Exchange Traded and Simplify Equity

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

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

Diversification Opportunities for Exchange Traded and Simplify Equity

0.0

Correlation Coefficient

Exchange Traded  Simplify Equity

Pay attention - limited upside

The 3 months correlation between Exchange and Simplify is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Exchange Traded Concepts and Simplify Equity PLUS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simplify Equity PLUS and Exchange Traded 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 Exchange Traded Concepts are associated (or correlated) with Simplify Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simplify Equity PLUS has no effect on the direction of Exchange Traded i.e., Exchange Traded and Simplify Equity go up and down completely randomly.

Pair Corralation between Exchange Traded and Simplify Equity

If you would invest  3,838  in Simplify Equity PLUS on May 3, 2025 and sell it today you would earn a total of  772.00  from holding Simplify Equity PLUS or generate 20.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	3.23%
Values	Daily Returns

Exchange Traded Concepts  vs.  Simplify Equity PLUS

Exchange Traded Concepts

Risk-Adjusted Performance

Very Weak

Over the last 90 days Exchange Traded Concepts has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Exchange Traded is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Simplify Equity PLUS

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Simplify Equity PLUS are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Simplify Equity exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Exchange Traded and Simplify Equity

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

The idea behind Exchange Traded Concepts and Simplify Equity PLUS 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.