Correlation Between GraniteShares 15x and Simplify Exchange

Can any of the company-specific risk be diversified away by investing in both GraniteShares 15x 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 GraniteShares 15x and Simplify Exchange into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GraniteShares 15x Long and Simplify Exchange Traded, you can compare the effects of market volatilities on GraniteShares 15x 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 GraniteShares 15x with a short position of Simplify Exchange. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares 15x and Simplify Exchange.

Diversification Opportunities for GraniteShares 15x and Simplify Exchange

0.17

Correlation Coefficient

GraniteShares 15x  Simplify Exchange

Average diversification

The 3 months correlation between GraniteShares and Simplify is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares 15x Long 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 GraniteShares 15x 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 GraniteShares 15x Long 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 GraniteShares 15x i.e., GraniteShares 15x and Simplify Exchange go up and down completely randomly.

Pair Corralation between GraniteShares 15x and Simplify Exchange

Considering the 90-day investment horizon GraniteShares 15x Long is expected to under-perform the Simplify Exchange. In addition to that, GraniteShares 15x is 7.78 times more volatile than Simplify Exchange Traded. It trades about -0.27 of its total potential returns per unit of risk. Simplify Exchange Traded is currently generating about 0.39 per unit of volatility. If you would invest  2,118  in Simplify Exchange Traded on December 5, 2024 and sell it today you would earn a total of  73.00  from holding Simplify Exchange Traded or generate 3.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

GraniteShares 15x Long  vs.  Simplify Exchange Traded

GraniteShares 15x Long

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GraniteShares 15x Long are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental drivers, GraniteShares 15x may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Simplify Exchange Traded

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Simplify Exchange Traded are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Simplify Exchange is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with GraniteShares 15x and Simplify Exchange

The main advantage of trading using opposite GraniteShares 15x and Simplify Exchange positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares 15x 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 GraniteShares 15x Long 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.

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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.