Correlation Between Affinity World and Simplify Interest

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

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

Diversification Opportunities for Affinity World and Simplify Interest

-0.4

Correlation Coefficient

Affinity World  Simplify Interest

Very good diversification

The 3 months correlation between Affinity and Simplify is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Affinity World Leaders and Simplify Interest Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simplify Interest Rate and Affinity World 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 Affinity World Leaders are associated (or correlated) with Simplify Interest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simplify Interest Rate has no effect on the direction of Affinity World i.e., Affinity World and Simplify Interest go up and down completely randomly.

Pair Corralation between Affinity World and Simplify Interest

Given the investment horizon of 90 days Affinity World Leaders is expected to generate 0.28 times more return on investment than Simplify Interest. However, Affinity World Leaders is 3.54 times less risky than Simplify Interest. It trades about 0.29 of its potential returns per unit of risk. Simplify Interest Rate is currently generating about -0.03 per unit of risk. If you would invest  3,096  in Affinity World Leaders on May 16, 2025 and sell it today you would earn a total of  390.00  from holding Affinity World Leaders or generate 12.6% return on investment over 90 days.

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

Affinity World Leaders  vs.  Simplify Interest Rate

Affinity World Leaders

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Affinity World Leaders are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile fundamental indicators, Affinity World may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Simplify Interest Rate

Risk-Adjusted Performance

Weakest

Over the last 90 days Simplify Interest Rate has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Pair Trading with Affinity World and Simplify Interest

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

The idea behind Affinity World Leaders and Simplify Interest Rate 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.