Correlation Between AXS 2X and Simplify Asset

Can any of the company-specific risk be diversified away by investing in both AXS 2X and Simplify Asset 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 AXS 2X and Simplify Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AXS 2X Innovation and Simplify Asset Management, you can compare the effects of market volatilities on AXS 2X and Simplify Asset 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 AXS 2X with a short position of Simplify Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXS 2X and Simplify Asset.

Diversification Opportunities for AXS 2X and Simplify Asset

0.81

Correlation Coefficient

AXS 2X  Simplify Asset

Very poor diversification

The 3 months correlation between AXS and Simplify is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding AXS 2X Innovation and Simplify Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simplify Asset Management and AXS 2X 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 AXS 2X Innovation are associated (or correlated) with Simplify Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simplify Asset Management has no effect on the direction of AXS 2X i.e., AXS 2X and Simplify Asset go up and down completely randomly.

Pair Corralation between AXS 2X and Simplify Asset

Given the investment horizon of 90 days AXS 2X Innovation is expected to generate 9.15 times more return on investment than Simplify Asset. However, AXS 2X is 9.15 times more volatile than Simplify Asset Management. It trades about 0.27 of its potential returns per unit of risk. Simplify Asset Management is currently generating about 0.0 per unit of risk. If you would invest  3,200  in AXS 2X Innovation on May 2, 2025 and sell it today you would earn a total of  3,259  from holding AXS 2X Innovation or generate 101.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	34.43%
Values	Daily Returns

AXS 2X Innovation  vs.  Simplify Asset Management

AXS 2X Innovation

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AXS 2X Innovation are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, AXS 2X disclosed solid returns over the last few months and may actually be approaching a breakup point.

Simplify Asset Management

Risk-Adjusted Performance

Very Weak

Over the last 90 days Simplify Asset Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Simplify Asset is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with AXS 2X and Simplify Asset

The main advantage of trading using opposite AXS 2X and Simplify Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXS 2X position performs unexpectedly, Simplify Asset 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 Asset will offset losses from the drop in Simplify Asset's long position.

The idea behind AXS 2X Innovation and Simplify Asset Management 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.