Correlation Between Simplify Exchange and Strategy Shares

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

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

Diversification Opportunities for Simplify Exchange and Strategy Shares

-0.66

Correlation Coefficient

Simplify Exchange  Strategy Shares

Excellent diversification

The 3 months correlation between Simplify and Strategy is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Simplify Exchange Traded and Strategy Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategy Shares and Simplify Exchange 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 Exchange Traded are associated (or correlated) with Strategy Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategy Shares has no effect on the direction of Simplify Exchange i.e., Simplify Exchange and Strategy Shares go up and down completely randomly.

Pair Corralation between Simplify Exchange and Strategy Shares

Given the investment horizon of 90 days Simplify Exchange Traded is expected to under-perform the Strategy Shares. In addition to that, Simplify Exchange is 8.83 times more volatile than Strategy Shares. It trades about -0.07 of its total potential returns per unit of risk. Strategy Shares is currently generating about 0.26 per unit of volatility. If you would invest  2,456  in Strategy Shares on May 9, 2025 and sell it today you would earn a total of  91.00  from holding Strategy Shares or generate 3.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Simplify Exchange Traded  vs.  Strategy Shares

Simplify Exchange Traded

Risk-Adjusted Performance

Weakest

Over the last 90 days Simplify Exchange Traded has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Etf's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Strategy Shares

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Strategy Shares are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Strategy Shares is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Simplify Exchange and Strategy Shares

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

The idea behind Simplify Exchange Traded and Strategy Shares 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.