Correlation Between Simplify Exchange and Global X
Can any of the company-specific risk be diversified away by investing in both Simplify Exchange and Global X 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 Global X 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 Global X NASDAQ, you can compare the effects of market volatilities on Simplify Exchange and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simplify Exchange and Global X.
Diversification Opportunities for Simplify Exchange and Global X
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Simplify and Global is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Simplify Exchange Traded and Global X NASDAQ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X NASDAQ 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X NASDAQ has no effect on the direction of Simplify Exchange i.e., Simplify Exchange and Global X go up and down completely randomly.
Pair Corralation between Simplify Exchange and Global X
Given the investment horizon of 90 days Simplify Exchange Traded is expected to generate 0.65 times more return on investment than Global X. However, Simplify Exchange Traded is 1.55 times less risky than Global X. It trades about 0.16 of its potential returns per unit of risk. Global X NASDAQ is currently generating about 0.09 per unit of risk. If you would invest 2,692 in Simplify Exchange Traded on September 1, 2024 and sell it today you would earn a total of 308.00 from holding Simplify Exchange Traded or generate 11.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simplify Exchange Traded vs. Global X NASDAQ
Performance |
| Timeline |
| Simplify Exchange Traded |
| Global X NASDAQ |
Simplify Exchange and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simplify Exchange and Global X
The main advantage of trading using opposite Simplify Exchange and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simplify Exchange position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| Simplify Exchange vs. Core Alternative ETF | Simplify Exchange vs. Invesco SP 500 | Simplify Exchange vs. ETF Series Solutions | Simplify Exchange vs. WisdomTree Target Range |
| Global X vs. Core Alternative ETF | Global X vs. Invesco SP 500 | Global X vs. ETF Series Solutions | Global X vs. WisdomTree Target Range |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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