Correlation Between Simplify Asset and IM Global

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

By analyzing existing cross correlation between Simplify Asset Management and IM Global Partner, you can compare the effects of market volatilities on Simplify Asset and IM Global 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 Asset with a short position of IM Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simplify Asset and IM Global.

Diversification Opportunities for Simplify Asset and IM Global

0.71

Correlation Coefficient

Simplify Asset  IM Global

Poor diversification

The 3 months correlation between Simplify and IRBA is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Simplify Asset Management and IM Global Partner in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IM Global Partner and Simplify Asset 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 Asset Management are associated (or correlated) with IM Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IM Global Partner has no effect on the direction of Simplify Asset i.e., Simplify Asset and IM Global go up and down completely randomly.

Pair Corralation between Simplify Asset and IM Global

If you would invest  940.00  in IM Global Partner on October 9, 2024 and sell it today you would earn a total of  0.00  from holding IM Global Partner or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Simplify Asset Management  vs.  IM Global Partner

Simplify Asset Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Simplify Asset Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Simplify Asset is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

IM Global Partner

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IM Global Partner has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, IM Global is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Simplify Asset and IM Global

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

The idea behind Simplify Asset Management and IM Global Partner 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.