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 Funds, 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
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Simplify and Global is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Simplify Exchange Traded 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 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 Funds 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
Considering the 90-day investment horizon Simplify Exchange Traded is expected to generate 1.59 times more return on investment than Global X. However, Simplify Exchange is 1.59 times more volatile than Global X Funds. It trades about 0.12 of its potential returns per unit of risk. Global X Funds is currently generating about 0.11 per unit of risk. If you would invest 2,103 in Simplify Exchange Traded on October 24, 2024 and sell it today you would earn a total of 19.00 from holding Simplify Exchange Traded or generate 0.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simplify Exchange Traded vs. Global X Funds
Performance |
| Timeline |
| Simplify Exchange Traded |
| Global X Funds |
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. Global X Funds | Simplify Exchange vs. US Treasury 12 | Simplify Exchange vs. Tidal Trust II | Simplify Exchange vs. Franklin Liberty Treasury |
| Global X vs. US Treasury 12 | Global X vs. Tidal Trust II | Global X vs. Franklin Liberty Treasury | Global X vs. SPDR Bloomberg 1 3 |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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