Correlation Between Simplify Next and Global X
Can any of the company-specific risk be diversified away by investing in both Simplify Next 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 Next 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 Next Intangible and Global X Funds, you can compare the effects of market volatilities on Simplify Next 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 Next with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simplify Next and Global X.
Diversification Opportunities for Simplify Next and Global X
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Simplify and Global is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Simplify Next Intangible and Global X Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Funds and Simplify Next 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 Next Intangible 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 Funds has no effect on the direction of Simplify Next i.e., Simplify Next and Global X go up and down completely randomly.
Pair Corralation between Simplify Next and Global X
Given the investment horizon of 90 days Simplify Next Intangible is expected to generate 1.32 times more return on investment than Global X. However, Simplify Next is 1.32 times more volatile than Global X Funds. It trades about 0.3 of its potential returns per unit of risk. Global X Funds is currently generating about -0.22 per unit of risk. If you would invest 2,724 in Simplify Next Intangible on September 3, 2024 and sell it today you would earn a total of 174.00 from holding Simplify Next Intangible or generate 6.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simplify Next Intangible vs. Global X Funds
Performance |
| Timeline |
| Simplify Next Intangible |
| Global X Funds |
Simplify Next and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simplify Next and Global X
The main advantage of trading using opposite Simplify Next and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simplify Next 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 Next vs. Global X Funds | Simplify Next vs. Dell Technologies | Simplify Next vs. Juniper Networks | Simplify Next vs. HUMANA INC |
| Global X vs. SCOR PK | Global X vs. HUMANA INC | Global X vs. Aquagold International | Global X vs. Barloworld Ltd ADR |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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