Correlation Between Simplify Equity and STKD Bitcoin
Can any of the company-specific risk be diversified away by investing in both Simplify Equity and STKD Bitcoin 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 Equity and STKD Bitcoin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simplify Equity PLUS and STKD Bitcoin Gold, you can compare the effects of market volatilities on Simplify Equity and STKD Bitcoin 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 Equity with a short position of STKD Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simplify Equity and STKD Bitcoin.
Diversification Opportunities for Simplify Equity and STKD Bitcoin
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Simplify and STKD is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Simplify Equity PLUS and STKD Bitcoin Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STKD Bitcoin Gold and Simplify Equity 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 Equity PLUS are associated (or correlated) with STKD Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STKD Bitcoin Gold has no effect on the direction of Simplify Equity i.e., Simplify Equity and STKD Bitcoin go up and down completely randomly.
Pair Corralation between Simplify Equity and STKD Bitcoin
Given the investment horizon of 90 days Simplify Equity is expected to generate 2.79 times less return on investment than STKD Bitcoin. But when comparing it to its historical volatility, Simplify Equity PLUS is 2.98 times less risky than STKD Bitcoin. It trades about 0.16 of its potential returns per unit of risk. STKD Bitcoin Gold is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,785 in STKD Bitcoin Gold on November 3, 2024 and sell it today you would earn a total of 238.00 from holding STKD Bitcoin Gold or generate 8.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Simplify Equity PLUS vs. STKD Bitcoin Gold
Performance |
| Timeline |
| Simplify Equity PLUS |
| STKD Bitcoin Gold |
Simplify Equity and STKD Bitcoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simplify Equity and STKD Bitcoin
The main advantage of trading using opposite Simplify Equity and STKD Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simplify Equity position performs unexpectedly, STKD Bitcoin 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 STKD Bitcoin will offset losses from the drop in STKD Bitcoin's long position.| Simplify Equity vs. First Trust SkyBridge | Simplify Equity vs. VanEck Digital Transformation | Simplify Equity vs. Global X Blockchain | Simplify Equity vs. Bitcoin Strategy Profund |
| STKD Bitcoin vs. First Trust Multi Asset | STKD Bitcoin vs. Collaborative Investment Series | STKD Bitcoin vs. Northern Lights | STKD Bitcoin vs. Ocean Park International |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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