Correlation Between Simplify Volatility and ETRACS Quarterly

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

By analyzing existing cross correlation between Simplify Volatility Premium and ETRACS Quarterly Pay, you can compare the effects of market volatilities on Simplify Volatility and ETRACS Quarterly 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 Volatility with a short position of ETRACS Quarterly. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simplify Volatility and ETRACS Quarterly.

Diversification Opportunities for Simplify Volatility and ETRACS Quarterly

-0.05

Correlation Coefficient

Simplify Volatility  ETRACS Quarterly

Good diversification

The 3 months correlation between Simplify and ETRACS is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Simplify Volatility Premium and ETRACS Quarterly Pay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETRACS Quarterly Pay and Simplify Volatility 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 Volatility Premium are associated (or correlated) with ETRACS Quarterly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETRACS Quarterly Pay has no effect on the direction of Simplify Volatility i.e., Simplify Volatility and ETRACS Quarterly go up and down completely randomly.

Pair Corralation between Simplify Volatility and ETRACS Quarterly

Given the investment horizon of 90 days Simplify Volatility is expected to generate 176.0 times less return on investment than ETRACS Quarterly. In addition to that, Simplify Volatility is 1.93 times more volatile than ETRACS Quarterly Pay. It trades about 0.0 of its total potential returns per unit of risk. ETRACS Quarterly Pay is currently generating about 0.07 per unit of volatility. If you would invest  2,670  in ETRACS Quarterly Pay on May 21, 2025 and sell it today you would earn a total of  108.00  from holding ETRACS Quarterly Pay or generate 4.04% return on investment over 90 days.

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

Simplify Volatility Premium  vs.  ETRACS Quarterly Pay

Simplify Volatility

Risk-Adjusted Performance

Weakest

Over the last 90 days Simplify Volatility Premium has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Simplify Volatility is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

ETRACS Quarterly Pay

Risk-Adjusted Performance

Weakest

Compared to the overall equity markets, risk-adjusted returns on investments in ETRACS Quarterly Pay are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong fundamental indicators, ETRACS Quarterly is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Simplify Volatility and ETRACS Quarterly

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

The idea behind Simplify Volatility Premium and ETRACS Quarterly Pay 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..