Correlation Between Simplify Exchange and LHA Market
Can any of the company-specific risk be diversified away by investing in both Simplify Exchange and LHA Market 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 LHA Market 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 LHA Market State, you can compare the effects of market volatilities on Simplify Exchange and LHA Market 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 LHA Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simplify Exchange and LHA Market.
Diversification Opportunities for Simplify Exchange and LHA Market
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Simplify and LHA is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Simplify Exchange Traded and LHA Market State in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LHA Market State 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 LHA Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LHA Market State has no effect on the direction of Simplify Exchange i.e., Simplify Exchange and LHA Market go up and down completely randomly.
Pair Corralation between Simplify Exchange and LHA Market
Given the investment horizon of 90 days Simplify Exchange Traded is expected to generate 0.89 times more return on investment than LHA Market. However, Simplify Exchange Traded is 1.13 times less risky than LHA Market. It trades about 0.18 of its potential returns per unit of risk. LHA Market State is currently generating about -0.04 per unit of risk. If you would invest 2,918 in Simplify Exchange Traded on August 25, 2024 and sell it today you would earn a total of 59.00 from holding Simplify Exchange Traded or generate 2.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simplify Exchange Traded vs. LHA Market State
Performance |
| Timeline |
| Simplify Exchange Traded |
| LHA Market State |
Simplify Exchange and LHA Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simplify Exchange and LHA Market
The main advantage of trading using opposite Simplify Exchange and LHA Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simplify Exchange position performs unexpectedly, LHA Market 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 LHA Market will offset losses from the drop in LHA Market's long position.| Simplify Exchange vs. Simplify Equity PLUS | Simplify Exchange vs. Simplify Volatility Premium | Simplify Exchange vs. Simplify Exchange Traded | Simplify Exchange vs. Simplify Equity PLUS |
| LHA Market vs. ETF Series Solutions | LHA Market vs. Northern Lights | LHA Market vs. Innovator Nasdaq 100 Power | LHA Market vs. Tidal ETF Trust |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Global Correlations Find global opportunities by holding instruments from different markets |