Correlation Between Simplify Exchange and Rayliant Quantamental

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Can any of the company-specific risk be diversified away by investing in both Simplify Exchange and Rayliant Quantamental 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 Rayliant Quantamental 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 Rayliant Quantamental China, you can compare the effects of market volatilities on Simplify Exchange and Rayliant Quantamental 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 Rayliant Quantamental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simplify Exchange and Rayliant Quantamental.

Diversification Opportunities for Simplify Exchange and Rayliant Quantamental

SimplifyRayliantDiversified AwaySimplifyRayliantDiversified Away100%
0.06
  Correlation Coefficient

Significant diversification

The 3 months correlation between Simplify and Rayliant is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Simplify Exchange Traded and Rayliant Quantamental China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rayliant Quantamental 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 Rayliant Quantamental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rayliant Quantamental has no effect on the direction of Simplify Exchange i.e., Simplify Exchange and Rayliant Quantamental go up and down completely randomly.

Pair Corralation between Simplify Exchange and Rayliant Quantamental

Given the investment horizon of 90 days Simplify Exchange Traded is expected to under-perform the Rayliant Quantamental. But the etf apears to be less risky and, when comparing its historical volatility, Simplify Exchange Traded is 1.01 times less risky than Rayliant Quantamental. The etf trades about -0.07 of its potential returns per unit of risk. The Rayliant Quantamental China is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,430  in Rayliant Quantamental China on November 25, 2024 and sell it today you would earn a total of  21.00  from holding Rayliant Quantamental China or generate 1.47% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Simplify Exchange Traded  vs.  Rayliant Quantamental China

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -6-4-20246
JavaScript chart by amCharts 3.21.15PINK RAYC
       Timeline  
Simplify Exchange Traded 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Simplify Exchange Traded has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Simplify Exchange is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb29.53030.53131.532
Rayliant Quantamental 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Rayliant Quantamental China are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Rayliant Quantamental is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb13.51414.515

Simplify Exchange and Rayliant Quantamental Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-1.75-1.31-0.87-0.43-0.0220.340.781.221.662.1 0.050.100.150.200.250.30
JavaScript chart by amCharts 3.21.15PINK RAYC
       Returns  

Pair Trading with Simplify Exchange and Rayliant Quantamental

The main advantage of trading using opposite Simplify Exchange and Rayliant Quantamental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simplify Exchange position performs unexpectedly, Rayliant Quantamental 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 Rayliant Quantamental will offset losses from the drop in Rayliant Quantamental's long position.
The idea behind Simplify Exchange Traded and Rayliant Quantamental China 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.
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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