Correlation Between Capitol Series and Simplify Exchange

Can any of the company-specific risk be diversified away by investing in both Capitol Series and Simplify Exchange 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 Capitol Series and Simplify Exchange into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Capitol Series Trust and Simplify Exchange Traded, you can compare the effects of market volatilities on Capitol Series and Simplify Exchange 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 Capitol Series with a short position of Simplify Exchange. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capitol Series and Simplify Exchange.

Diversification Opportunities for Capitol Series and Simplify Exchange

0.59

Correlation Coefficient

Capitol Series  Simplify Exchange

Very weak diversification

The 3 months correlation between Capitol and Simplify is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Capitol Series Trust and Simplify Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simplify Exchange Traded and Capitol Series 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 Capitol Series Trust are associated (or correlated) with Simplify Exchange. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simplify Exchange Traded has no effect on the direction of Capitol Series i.e., Capitol Series and Simplify Exchange go up and down completely randomly.

Pair Corralation between Capitol Series and Simplify Exchange

Considering the 90-day investment horizon Capitol Series Trust is expected to under-perform the Simplify Exchange. In addition to that, Capitol Series is 2.75 times more volatile than Simplify Exchange Traded. It trades about -0.21 of its total potential returns per unit of risk. Simplify Exchange Traded is currently generating about -0.1 per unit of volatility. If you would invest  3,003  in Simplify Exchange Traded on October 10, 2024 and sell it today you would lose (42.00) from holding Simplify Exchange Traded or give up 1.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Capitol Series Trust  vs.  Simplify Exchange Traded

Capitol Series Trust

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Capitol Series Trust are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Capitol Series is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Simplify Exchange Traded

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Simplify Exchange Traded are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Simplify Exchange is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Capitol Series and Simplify Exchange

The main advantage of trading using opposite Capitol Series and Simplify Exchange positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capitol Series position performs unexpectedly, Simplify Exchange 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 Simplify Exchange will offset losses from the drop in Simplify Exchange's long position.

The idea behind Capitol Series Trust and Simplify Exchange Traded 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.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.