Correlation Between Simplify Propel and TCW Transform

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

By analyzing existing cross correlation between Simplify Propel Opportunities and TCW Transform Supply, you can compare the effects of market volatilities on Simplify Propel and TCW Transform 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 Propel with a short position of TCW Transform. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simplify Propel and TCW Transform.

Diversification Opportunities for Simplify Propel and TCW Transform

0.78

Correlation Coefficient

Simplify Propel  TCW Transform

Poor diversification

The 3 months correlation between Simplify and TCW is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Simplify Propel Opportunities and TCW Transform Supply in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TCW Transform Supply and Simplify Propel 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 Propel Opportunities are associated (or correlated) with TCW Transform. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TCW Transform Supply has no effect on the direction of Simplify Propel i.e., Simplify Propel and TCW Transform go up and down completely randomly.

Pair Corralation between Simplify Propel and TCW Transform

Given the investment horizon of 90 days Simplify Propel is expected to generate 1.12 times less return on investment than TCW Transform. In addition to that, Simplify Propel is 1.73 times more volatile than TCW Transform Supply. It trades about 0.14 of its total potential returns per unit of risk. TCW Transform Supply is currently generating about 0.28 per unit of volatility. If you would invest  6,115  in TCW Transform Supply on May 3, 2025 and sell it today you would earn a total of  900.00  from holding TCW Transform Supply or generate 14.72% return on investment over 90 days.

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

Simplify Propel Opportunities  vs.  TCW Transform Supply

Simplify Propel Oppo

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Simplify Propel Opportunities are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Simplify Propel demonstrated solid returns over the last few months and may actually be approaching a breakup point.

TCW Transform Supply

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TCW Transform Supply are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, TCW Transform reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Simplify Propel and TCW Transform

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

The idea behind Simplify Propel Opportunities and TCW Transform Supply 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..