Correlation Between Simplify Interest and IMGP DBi

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

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

Diversification Opportunities for Simplify Interest and IMGP DBi

-0.21

Correlation Coefficient

Simplify Interest  IMGP DBi

Very good diversification

The 3 months correlation between Simplify and IMGP is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Simplify Interest Rate and iMGP DBi Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iMGP DBi Managed and Simplify Interest 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 Interest Rate are associated (or correlated) with IMGP DBi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iMGP DBi Managed has no effect on the direction of Simplify Interest i.e., Simplify Interest and IMGP DBi go up and down completely randomly.

Pair Corralation between Simplify Interest and IMGP DBi

Given the investment horizon of 90 days Simplify Interest Rate is expected to generate 7.42 times more return on investment than IMGP DBi. However, Simplify Interest is 7.42 times more volatile than iMGP DBi Managed. It trades about 0.04 of its potential returns per unit of risk. iMGP DBi Managed is currently generating about 0.15 per unit of risk. If you would invest  5,793  in Simplify Interest Rate on April 22, 2025 and sell it today you would earn a total of  243.00  from holding Simplify Interest Rate or generate 4.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Simplify Interest Rate  vs.  iMGP DBi Managed

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 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong forward indicators, Simplify Interest is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

iMGP DBi Managed

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iMGP DBi Managed are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable primary indicators, IMGP DBi is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Simplify Interest and IMGP DBi

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

The idea behind Simplify Interest Rate and iMGP DBi Managed 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.